TELEWEST COMMUNICATIONS PLC /NEW/, DEF 14A, 1997-03-26

TELEWEST COMMUNICATIONS PLC /NEW/
DEF 14A, 1997-03-26
CABLE & OTHER PAY TELEVISION SERVICES

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SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.___)

Filed by the Registrant /X/

Filed by a Party other than the Registrant / /

Check the appropriate box:

/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

TELEWEST COMMUNICATIONS PLC
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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/ / Fee paid previously with preliminary materials.

/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid: $
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

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TELEWEST COMMUNICATIONS PLC 1
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THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in
any doubt as to the action you should take, please consult an appropriate
independent adviser immediately. If you have sold or otherwise transferred all
of your holding of ordinary shares in Telewest Communications plc, you should
send this document together with the accompanying Form of Proxy, to the
purchaser or transferee or to the stockbroker, bank or other agent through whom
the sale or transfer was effected for transmission to the purchaser or
transferee.
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[LOGO] TELEWEST
COMMUNICATIONS

Telewest Communications plc

Notice of
Annual General Meeting

Notice of the Annual General Meeting of the Company to be held at The Grocers'
Hall, Princes Street, London EC2R 8AD on Friday, 9 May 1997 at 10.00 am is set
out on pages 6 to 8. Forms of Proxy for the Annual General Meeting must be
received by the Company's Registrars, Lloyds Bank plc, Registrar's Department,
The Causeway, Worthing, West Sussex, England BN99 6DB not later than 10.00 am on
7 May 1997.

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2 TELEWEST COMMUNICATIONS PLC
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Telewest Communications plc
(Registered in England and Wales No. 2983307)

Genesis Business Park
Albert Drive, Woking
Surrey GU21 5RW
United Kingdom

26 March 1997

Dear Shareholder,

1997 Annual General Meeting

The 1997 Annual General Meeting of the Company ("AGM") is to be held on Friday,
9 May 1997 at 10.00 am (United Kingdom time) at The Grocers' Hall, Princes
Street, London EC2R 8AD. The Notice convening the AGM, the Proxy Card and the
related Proxy Statement accompany this letter. I am writing to give you more
information about the resolutions to be considered at the AGM.

Resolutions 1 to 12 deal with the adoption of the 1996 Directors' Report and
Accounts and the reappointment of the Directors. Resolutions 13 and 14 deal with
the Directors' authority to allot (i.e., issue) shares and the disapplication of
pre-emption rights. With regard to Resolution 13, under English company law, a
company's directors may not allot shares, unless they are authorised to do so by
an ordinary resolution of the shareholders of the company or under its articles
of association. Resolution 13 renews your Directors' authority to allot up to
309,189,200 ordinary shares of 10p each in the capital of the Company ("Telewest
shares"), representing just under one third of the Company's current issued
ordinary share capital, which proportion is in accordance with U.K.
institutional guidelines.

Resolution 14, a special resolution, provides the Board with the power to allot
shares for cash without first offering those shares pro rata to existing
shareholders, as otherwise required by the Companies Act 1985. This would
empower your Directors to issue shares for cash other than pro rata to
shareholders in limited circumstances in connection with a rights issue or open
offer and, in addition, to issue for cash up to an aggregate number of
46,378,380 shares, representing just under 5 per cent of the Company's current
issued ordinary share capital, which proportion is also in accordance with U.K.
institutional guidelines.

The Board considers that it is in the best interests of the Company that it
should have the flexibility sought in Resolutions 13 and 14 although it has no
present intention of allotting Telewest shares thereunder. The authorities
conferred by these resolutions, if passed, will lapse fifteen months after the
AGM or at the conclusion of the 1998 Annual General Meeting, whichever occurs
first.

Resolution 15 deals with the reappointment of KPMG Audit plc as auditors of the
Company.

Resolutions 16 and 17 propose the approval by ordinary resolutions of two new
share plans, the Telewest Equity Participation Plan and the Telewest Long Term
Incentive Plan. The Equity Participation Plan is a plan linked to the Company's
annual performance related cash bonus scheme. Under this plan an employee can
elect to acquire Telewest shares using part of his bonus ("Bonus shares") and
the Company then provisionally allocates matching shares for no consideration to
the employee. Retention of the matching shares by the employee is dependent on
the employee remaining employed by the Company and retaining the Bonus shares
for three years after the date of the grant of the matching award. The Long Term
Incentive Plan is designed to replace the Telewest Restricted Share Scheme.
Executive employees will be made provisional allocations of Telewest shares
which will not vest unless performance criteria based upon total shareholder
return are met. Awards granted under the scheme shall not be pensionable.
Participants in either of these plans will (save in exceptional circumstances)
cease to be eligible for the grant of options under the Telewest 1995 (No. 1)
Executive Share Option Scheme and the Telewest 1995 (No. 2) Executive Share
Option Scheme. A summary of the rules of these plans is set out in the Appendix.

Given the considerable expansion in the Company's operations, the Company is
taking this opportunity to increase its borrowing power under the Articles of
Association. Resolution 18 is a special resolution to allow the Articles of
Association to increase the borrowing powers of the Company to the greater of
(pound)4 billion and five times the adjusted capital and reserves (as defined in
the Articles of Association). The Company's borrowing powers were previously
limited to the greater of (pound)2 billion and four times the adjusted capital
and reserves.

Action to be Taken

If you are unable to attend the AGM, I urge you to vote at the meeting by proxy.
A Proxy Card for use by holders of ordinary shares at the AGM is enclosed.
Holders of ordinary shares are advised to complete and return the Proxy Card in
accordance with the instructions printed on it so as to arrive at the Company's
Registrars as soon as possible, but in any event not later than 10.00 am on
Wednesday, 7 May 1997. The return of the Proxy Card will not preclude a holder
of ordinary shares from attending and voting in person at the AGM if he or she
so wishes. Details concerning proxy voting are set out in the Proxy Statement.

The Directors confirm that they believe the proposals contained in the Notice of
AGM are in the best interests of shareholders as a whole and recommend that
shareholders vote for the resolutions.

Refreshments will be available prior to the meeting and my fellow Directors and
I look forward to meeting you then.

Yours sincerely

Fred Vierra
Chairman

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TELEWEST COMMUNICATIONS PLC 3
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Appendix

PART 1

SUMMARY OF THE TELEWEST EQUITY PARTICIPATION PLAN (the "EPP")

1 Eligibility

Any Director or employee of a participating company who is required to devote
the whole or substantially the whole of his working time to the service of a
participating company may be invited to participate in the EPP (other than a
person who is within two years of the date on which he is bound to retire in
accordance with the terms of his contract of employment). It is currently
expected that the plan will be made available to members of middle management
and above. Based on current employment levels, approximately 400 employees are
expected to be invited to participate in the EPP.

2 Awards

Under the Telewest annual performance-related Short Term Incentive Plan ("STIP")
participants may be due a cash bonus. Under Part A of the EPP, at the
Remuneration Committee's discretion, a participant can agree to forgo up to 50%
of the bonus payable to him (or such other percentage as the Remuneration
Committee may determine), before deduction of tax, and receive instead a
conditional right to acquire Telewest shares (the "Bonus Option"). In return the
participant is provisionally allocated a matching number of Telewest shares
("Matching Shares") which will be transferred for no payment after three years.

Part B of the EPP provides that, at the Remuneration Committee's discretion, a
participant can use up to 50% of the bonus payable to him (or such other
percentage as the Remuneration Committee may determine), after deduction of tax,
to buy Telewest shares ("Bonus shares"). He must deposit the Bonus shares with
the trustee ("Trustee") of the Telewest employees' share ownership plan (the
"ESOP"), an independent trustee currently located in Jersey. In return, the
participant is granted an award of the right to conditionally be transferred a
matching number of Telewest shares ("Matching Shares") (after grossing up the
value of the Bonus shares) for no payment.

3 Making of Awards

Awards may be made during the six weeks following the 1996 Annual General
Meeting and thereafter during the six weeks following the announcement of the
Company's final, interim and quarterly results (and at other times in
exceptional circumstances). No awards may be made more than ten years following
the adoption of the EPP. Awards made under the EPP are personal to the
participant and, except on the death of the participant, may not be transferred.

4 Receipt of Shares

Under Part A, a Bonus Option may be exercised at any time but the Matching
Shares may only be transferred after three years and only if the Bonus Option
has not been exercised before the third anniversary of the date of grant of the
Bonus Option and the participant is still a Director or employee of the Group on
the third anniversary. If a participant ceases to be an employee of the Group
before the third anniversary because of his death, injury, disability,
redundancy or retirement at normal retirement age or because the company or
business which employs the participant is transferred out of the Group, Matching
Shares may be transferred early. If the Bonus Option has been partially
exercised before the third anniversary of the date of the grant of the Bonus
Option, the extent to which Matching Shares shall be transferred shall be
reduced proportionately. Special provisions apply if there is a take-over,
reconstruction or winding-up of the Company, whereby shares can be transferred
early.

Under Part B, Bonus shares may be withdrawn by the participant at his discretion
at any time after the date of the award but the Matching Shares provisionally
allocated by the Company may only be transferred after the third anniversary of
this date and only if the Bonus shares have not been withdrawn before such third
anniversary and the participant is still a director or employee of the Group on
the third anniversary. If a participant ceases to be an employee of the Group
before the third anniversary for the same reasons listed above in relation to
Part A, Matching Shares may be transferred early. The number of Matching Shares
so transferred will be reduced proportionately to the number of Bonus shares
that are withdrawn before the third anniversary of the date of grant. Special
provisions apply if there is a take-over, reconstruction or winding-up of the
Company, whereby shares can be transferred early.

5 Variation of Capital

In the event of any increase or variation in the share capital of the Company,
the Remuneration Committee may make such adjustments as it considers appropriate
to the number of shares which may be acquired under the award.

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4 TELEWEST COMMUNICATIONS PLC
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6 Limits and Subscription for Shares

The ESOP may subscribe for or purchase Telewest shares for the purposes of the
EPP or the Company may grant an option to the ESOP to subscribe for Telewest
shares for the purposes of the EPP. The Board does not intend to issue Telewest
shares to the ESOP at a price below the middle market quotation for a Telewest
share on the dealing day before the date of grant or, if issued other than on
exercise of an option, on the dealing day before the date of issue. In addition,
the following limits apply to the EPP:

(a) in any ten year period, the number of Telewest shares which may be
issued under the EPP, the Telewest Long Term Incentive Plan, and on
the exercise of options under any executive share option scheme may
not exceed 5% of the issued ordinary share capital of the Company;

(b) in the period of three years commencing 1997 and in any subsequent
three year period, not more than 3% of the issued ordinary share
capital of the Company may be issued under the EPP, the Telewest Long
Term Incentive Plan, and on the exercise of options under any
executive share option scheme;

(c) in the period of five years commencing 1997 and in any subsequent five
year period, not more than 5% of the issued ordinary share capital of
the Company may be issued under the EPP, the Telewest Long Term
Incentive Plan, and pursuant to any employees' share scheme;

(d) in any ten year period, the number of shares which may be issued under
the EPP, the Telewest Long Term Incentive Plan, and pursuant to any
employees' share scheme may not exceed 10% of the issued ordinary
share capital of the Company.

7 Amendments

The Remuneration Committee may at any time amend the EPP, or the terms of any
award granted under it, save that the prior approval of the Company in general
meeting will be required for amendments to the advantage of the participants, to
the eligibility requirements, to the limits on the number of Telewest shares
that can be issued under awards, to the maximum entitlement for any one
participant and to the rule concerning adjustments in the event of a variation
of capital.

PART 2

SUMMARY OF THE TELEWEST LONG TERM INCENTIVE PLAN (the "LTIP")

1 Eligibility

Any director or employee of a participating company who is required to devote
the whole or substantially the whole of his working time to the service of a
participating company may be invited to participate in the LTIP (other than a
person who is within two years of the date on which he is bound to retire in
accordance with the terms of his contract of employment). It is currently
expected that the plan will be made available to members of senior management.
Based on current employment levels, approximately 60 employees are expected to
be invited to participate in the LTIP.

2 Awards

An award consists of a right to receive Telewest shares for no payment, 50% of
the shares vesting being transferred on the third anniversary of the award date
and the remaining 50% of the shares vesting being transferred on the fourth
anniversary of the award date.

3 Performance Conditions

Vesting of an award is dependent on meeting performance conditions. The award is
divided equally, with vesting of 50% depending on the Company's total
shareholder return ("TSR") meeting a performance condition relating to the TSR
of FT-SE 100 companies and the remaining 50% depending on meeting a performance
condition relating to the TSR of a group of comparative companies (i.e.,
telecommunications, broadcasting and cable companies operating in the U.K. with
shares listed on the London Stock Exchange and cable companies operating in the
U.K. with shares listed on the Nasdaq National Market) in each case over a three
year period. If the Company's TSR is in the top quartile of the FT-SE 100
companies over that period, the participant will receive 50% of the number of
shares awarded to him; if the Company's TSR is 50th place in the FT-SE 100, the
participant will receive 12 1/2% of the number of shares awarded to him; if
below 50th place in the FT-SE 100, the participant will receive nothing in
respect of this portion of the award. Similarly, if the Company's TSR is in the
top quartile of the group of comparative companies, over that period, the
participant will receive 50% of the number of shares awarded to him; if the
Company's TSR is at the median position, the participant will receive 12 1/2% of
the number of shares awarded to him; if below the median position, the
participant

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TELEWEST COMMUNICATIONS PLC 5
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will receive nothing in respect of that portion of the award. In either test, a
proportionate number of shares will be received for intermediate positions. TSR
in each case will be calculated by reference to the cash flow generated by
dividends and capital appreciation on a share purchased at the beginning and
sold at the end of the period. The purchase and sale price will be taken to be
the average middle-market quotation for the period of three months preceding the
time in question.

4 Grant of Awards

Awards may be granted during the six weeks following the 1997 Annual General
Meeting and thereafter during the six weeks following the announcement of the
Company's final, interim and quarterly results (and at other times in
exceptional circumstances). No award may be granted more than ten years
following the adoption of the LTIP. Awards granted under the LTIP are personal
to the participant and, except on the death of the participant, may not be
transferred.

5 Transfer of Shares

If the participant remains employed by the Group and subject to the satisfaction
of the performance criteria, 50% of the shares subject to the award will be
transferred after three years from the date of grant, and 50% after four years
from the date of grant. However, early transfer is permitted in the event of
death, or cessation of employment through injury, disability, redundancy or
retirement at normal contractual retirement age, or because the company or
business which employs the participant is transferred out of the Group but only
in respect of a time-apportioned number of shares. Special provisions apply if
there is a take-over, reconstruction or winding-up of the Company, whereby
shares can be transferred early.

6 Variation of Capital

7 Limits and Subscription for Shares

The provisions set out in paragraph 6 of Part 1 apply equally. The value of
shares awarded under the LTIP in any financial year to any individual may not
exceed 100% of his annual salary (excluding benefits in kind), save in
exceptional circumstances.

8 Amendments

The Remuneration Committee may at any time amend the LTIP, or the terms of any
award granted under it, save that the prior approval of the Company in general
meeting will be required for amendments to the advantage of participants, to the
eligibility requirements, to the limits on the number of shares that can be
issued under awards, to the maximum entitlement for any one participant and to
the rule concerning adjustments in the event of a variation of capital.

Note:

This Appendix summarises the main features of the rules of the Telewest Equity
Participation Plan and the Telewest Long Term Incentive Plan, but does not form
part of them and should not be taken as affecting the interpretation of the
detailed terms and conditions constituting the rules. Copies of the draft rules
will be available for inspection at the registered office of the Company and at
the offices of the Company's solicitors, Clifford Chance, at 200 Aldersgate
Street, London EC1A 4JJ during usual business hours on weekdays (Saturdays and
public holidays excepted) up to the date of the 1997 Annual General Meeting and
at the meeting itself. The Remuneration Committee reserves the right up to the
time of the meeting to make such amendments and additions as it may consider
necessary or desirable, provided that such amendments and additions do not
conflict in any material respect with the summaries set out in this Appendix.

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6 TELEWEST COMMUNICATIONS PLC
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Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of Telewest
Communications plc (the "Company") will be held on Friday, 9 May 1997, at 10.00
am (United Kingdom time) at The Grocers' Hall, Princes Street, London EC2R 8AD
for the purpose of considering and, if thought fit, passing the resolutions set
out below. Resolutions 1 to 13 and 15 to 17 will be proposed as Ordinary
Resolutions and Resolutions 14 and 18 will be proposed as Special Resolutions.

Ordinary Business

1 To adopt the Directors' Report and Accounts of the Company for the year
ended 31 December 1996.

2 To reappoint Fred A. Vierra as a Director, who is retiring by rotation at
the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

3 To reappoint Anthony W.P. Stenham as a Director, who is retiring by
rotation at the forthcoming Annual General Meeting in accordance with the
Company's Articles of Association.

4 To reappoint Arthur G. Ames as a Director, who is retiring by rotation at
the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

5 To reappoint John H. Atterbury III as a Director, who is retiring by
rotation at the forthcoming Annual General Meeting in accordance with the
Company's Articles of Association.

6 To reappoint Lord Borrie QC as a Director, who is retiring by rotation at
the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

7 To reappoint Charles J. Burdick as a Director, who is retiring by rotation
at the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

8 To reappoint Stephen J. Davidson as a Director, who is retiring by rotation
at the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

9 To reappoint Lord Griffiths of Fforestfach as a Director, who is retiring
by rotation at the forthcoming Annual General Meeting in accordance with
the Company's Articles of Association.

10 To reappoint Charles M. Lillis as a Director, who is retiring by rotation
at the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

11 To reappoint James O. Robbins as a Director, who is retiring by rotation at
the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

12 To reappoint Adam N. Singer as a Director, who is retiring by rotation at
the forthcoming Annual General Meeting in accordance with the Company's
Articles of Association.

13 To approve the following Ordinary Resolution:

THAT in substitution for all previous authorities which are hereby revoked,
the Directors be generally and unconditionally authorised pursuant to
Section 80 of the Companies Act 1985 (the "Act") to exercise all or any
powers of the Company to allot relevant securities (within the meaning of
Section 80(2) of the Act) up to an aggregate nominal amount of
(pound)30,918,920, such authority to expire (unless previously renewed,
varied or revoked by the Company in a general meeting) on the earlier of 8
August 1998 or the conclusion of the Annual General Meeting of the Company
to be held in 1998, but the Company may make an offer or agreement which
would or might require relevant securities to be allotted after the expiry
of this authority and the Directors may allot relevant securities in
pursuance of that offer or agreement.

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TELEWEST COMMUNICATIONS PLC 7
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14 To approve the following Special Resolution:

THAT in substitution for all previous authorities which are hereby revoked,
and subject to the passing of Resolution 13, the Directors be empowered
pursuant to Section 95 of the Act to allot equity securities (within the
meaning of Section 94(2) of the Act) for cash pursuant to the authority
conferred by Resolution 13 as if Section 89(1) of the Act did not apply to
any such allotment. This power:

(i) expires on the earlier of 8 August 1998 or the conclusion of the
Annual General Meeting of the Company to be held in 1998, but the
Company may make an offer or agreement which would or might require
equity securities to be allotted after the expiry of this authority
and the Directors may allot equity securities in pursuance of that
offer or agreement; and

(ii) is limited to:

A allotments of equity securities where such securities have been
offered (whether by way of a rights issue, open offer or otherwise) to
holders of ordinary shares of 10p each in the capital of the Company
("Ordinary Shares") and, if in accordance with their rights, the
Directors so determine, to holders of other equity securities of any
class, in proportion (as nearly as may be) to their existing holdings
of Ordinary Shares or (as the case may be) other equity securities of
the class on the basis of their rights to receive such offer or,
failing which, on the basis that their holdings have been converted
into or that they have subscribed for Ordinary Shares on the basis
then applicable) subject to the Directors having a right to make such
exclusions or other arrangements in connection with the offer as they
deem necessary or expedient:

(a) to deal with equity securities representing fractional
entitlements; and

(b) to deal with legal or practical problems under the laws of, or
the requirements of, any recognised regulatory body or any stock
exchange in any territory; and

B allotments of equity securities for cash otherwise than pursuant to
paragraph A up to an aggregate nominal amount of (pound)4,637,838.00.

15 To reappoint KPMG Audit plc, as auditors, to serve from the conclusion of
the forthcoming Annual General Meeting to the Annual General Meeting of the
Company to be held in 1998, and to authorise the Directors to fix the
remuneration of the auditors.

Special Business

16 To approve the following Ordinary Resolution:

THAT:

(a)the Telewest Equity Participation Plan (the "EPP"), in the form set out
in the draft rules of the EPP produced to the meeting and for the purposes of
identification initialled by the Chairman and the main features of which are
summarised in the Appendix to the Chairman's letter, be and is hereby approved,
and the Board be and is hereby authorised to do all acts and things which it may
consider necessary or desirable to carry the same into effect (including the
provision of funds to the Trustee of the Telewest employees' share ownership
plan or any other employees' trust for the acquisition of Ordinary Shares in the
Company to be awarded under the EPP);

(b)the Directors may be counted in the quorum and vote in respect of any
matter connected with the EPP, notwithstanding that they may be interested in
the same (except that no Director may be counted in the quorum or vote in
respect of any matter solely concerning his own participation in the EPP).

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8 TELEWEST COMMUNICATIONS PLC
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17 To approve the following Ordinary Resolution:

THAT:

(a) the Telewest Long Term Incentive Plan (the "LTIP"), in the form set
out in the draft rules of the LTIP produced to the meeting and for the
purposes of identification initialled by the Chairman and the main
features of which are summarised in the Appendix to the Chairman's
letter, be and is hereby approved, and the Board be and is hereby
authorised to do all acts and things which it may consider necessary
or desirable to carry the same into effect (including the provision of
funds to the Trustee of the Telewest employees' share ownership plan
or any other employees' trust for the acquisition of Ordinary Shares
in the Company to be awarded under the LTIP);

(b) the Directors may be counted in the quorum and vote in respect of any
matter connected with the LTIP, notwithstanding that they may be
interested in the same (except that no Director may be counted in the
quorum or vote in respect of any matter solely concerning his own
participation in the LTIP).

18 To approve the following Special Resolution:

THAT the Articles of Association of the Company be altered by:

(i) the deletion in Article 104(B)(i) of (pound)2,000,000,000 and the
substitution for it of (pound)4,000,000,000; and

(ii) the deletion in Article 104(B)(ii) of the word "four" and the
substitution for it of the word "five".

This Notice and the related proxy materials are being mailed to shareholders on
the record at the close of business on 20 March 1997. All shareholders on the
record at the time of the Annual General Meeting (or any postponements or
adjournments thereof) will be entitled to vote at the meeting (or such
postponements or adjournments).

By Order of the Board of Directors Registered Office:
Telewest Communications plc
V. Hull, LLB Genesis Business Park
Company Secretary Albert Drive, Woking
Surrey GU21 5RW
United Kingdom
26 March 1997

Notes:

1 For information with respect to the voting requirements for Ordinary
Resolutions and Special Resolutions, see "Voting Requirements" in the Proxy
Statement accompanying this Notice.

2 A shareholder entitled to attend and vote at the Annual General Meeting is
also entitled to appoint one or more proxies to attend and, on a poll taken
at the meeting, vote instead of him or her. A proxy need not be a
shareholder of the Company.

3 To be effective, the instrument appointing a proxy and any authority under
which it is executed (or a notarially certified copy of each authority)
must be deposited at the offices of Lloyds Bank plc, Registrar's
Department, The Causeway, Worthing, West Sussex, England BN99 6DB, not less
than 48 hours before the time of the Annual General Meeting. A Proxy Card
is enclosed with this Notice. Completion and return of the Proxy Card will
not preclude a shareholder from attending and voting in person at the
meeting.

4 Copies of all the Directors' service contracts and the Register of
Directors' Interests kept by the Company under Section 325 of the Act will
be available for inspection at the registered office of the Company during
normal business hours on any weekday (Saturday excluded) from the date of
this Notice until the close of the meeting and at the place of the Annual
General Meeting for at least 15 minutes before, and during, the meeting.

EACH SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ACCOMPANYING PROXY CARD PROMPTLY

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TELEWEST COMMUNICATIONS PLC

GENESIS BUSINESS PARK
ALBERT DRIVE, WOKING
SURREY GU21 5RW
UNITED KINGDOM

PROXY STATEMENT

This Proxy Statement and the accompanying proxy card are first being mailed
on March 26, 1997 to holders of ordinary shares of 10 pence each (the "Ordinary
Shares") of Telewest Communications plc (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company to be used at
the 1997 Annual General Meeting of Shareholders. The Annual General Meeting will
be held on Friday, May 9, 1997 at 10:00 a.m. (United Kingdom time) at The
Grocers' Hall, Princes Street, London EC2R 8AD. Ordinary Shares can be voted at
the Annual General Meeting only if the shareholder is represented by proxy or is
present in person. All shareholders on the share register at the time of the
Annual General Meeting (or any postponements or adjournments thereof) will be
entitled to vote at the meeting (or such postponements or adjournments).

Each shareholder's vote is important. Accordingly, shareholders are urged
to sign and return the accompanying proxy card regardless of whether they plan
to attend the Annual General Meeting. To be effective, the proxy card (together
with any authority under which it is executed (or a notarially certified copy of
each such authority)) must be received at the Office of Lloyds Bank plc,
Registrar's Department, The Causeway, Worthing, West Sussex BN99 6DB, United
Kingdom, not less than 48 hours before the time of the Annual General Meeting.
Completion and return of a proxy card will not preclude a shareholder from
attending and voting in person at the meeting. If a shareholder attends and
votes by ballot at the Annual General Meeting, that vote will cancel any proxy
vote previously given. In addition, a shareholder giving a proxy may revoke it
at any time prior to the foregoing deadline for proxy voting by giving a valid
proxy to Lloyds Bank plc bearing a later date before such deadline.

When proxy cards are returned properly signed, the shares represented will
be voted in accordance with the shareholder's directions. If a proxy card is
signed and returned without specifying choices, the proxy will vote or abstain
at his discretion.

On March 1, 1997, there were 927,567,600 Ordinary Shares outstanding and
1,340 holders of record. Each Ordinary Share is entitled to one vote on all
matters properly brought before the Annual General Meeting. Two or more persons
holding Ordinary Shares (one of whom must be a representative of the TCI
Affiliate Group (as defined herein) and one of whom must be a representative of
the U S WEST Affiliate Group (as defined herein)) must be present in person or
by proxy to constitute a quorum to conduct business at the Annual General
Meeting.
<PAGE> 11

SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS

The following table sets forth certain information with respect to persons
known to the Company to be the beneficial owners, as of March 1, 1997, of more
than 5% of the Company's Ordinary Shares: Unless otherwise discussed below, the
persons named in the table have sole voting and investment power with respect to
all Ordinary Shares and Convertible Preference Shares indicated as being
beneficially owned by them.

<TABLE>
<CAPTION>
PERCENTAGE OF NUMBER OF PERCENTAGE OF
NUMBER OF OUTSTANDING CONVERTIBLE OUTSTANDING CONVERTIBLE
NAME AND ADDRESS OF ORDINARY ORDINARY PREFERENCE PREFERENCE
BENEFICIAL OWNER SHARES OWNED(1) SHARES SHARES OWNED(1) SHARES
- -------------------------- --------------- --------------- --------------- -----------------------
<S> <C> <C> <C> <C>
Tele-Communications,
Inc..................... 246,111,750 26.5 132,638,250 26.7
5619 DTC Parkway
Englewood, Colorado
80111(2)
U S WEST, Inc............. 246,111,750 26.5 132,638,250 26.7
7800 East Orchard Road
Englewood, Colorado
80111(3)
SBC Communications,
Inc..................... 91,997,480 9.9 115,395,104 23.3
2 Read's Way Suite 222,
Corporate Commons New
Castle, Delaware
19720(4)
Cox Communications,
Inc..................... 91,997,480 9.9 115,395,104 23.3
1400 Lake Hearn Drive
Atlanta, Georgia
30319(5)
</TABLE>

- ---------------

(1) For so long as the Ordinary Shares are listed on the London Stock Exchange,
subject to certain exceptions, a holder of Convertible Preference Shares is
not entitled to convert any of its Convertible Preference Shares into
Ordinary Shares to the extent that, immediately following such conversion,
the number of Ordinary Shares in the hands of the public (as specified in
the London Stock Exchange listing rules) would be less than 25%. In
addition, the TCI Affiliate Group, the U S WEST Affiliate Group, the SBC
Affiliate Group and the Cox Affiliate Group (each as defined on page 4
hereof) have agreed not to convert the Convertible Preference Shares held by
them other than in certain limited circumstances. See "-- Disposal and
Acquisition of Ordinary and Convertible Preference Shares" below.
Accordingly, the Ordinary Shares reflected in this table as beneficially
owned by a person do not include any Ordinary Shares that may be issuable
upon conversion of Convertible Preference Shares beneficially owned by such
person.

(2) All of the Ordinary Shares and Convertible Preference Shares that are listed
as beneficially owned by Tele-Communications, Inc. ("TCI") are owned by TW
Holdings, Inc. ("TW Holdings") (which also directly owns the 246,111,750
Ordinary Shares and 132,638,250 Convertible Preference Shares that are
listed as beneficially owned by U S WEST, Inc. ("U S WEST") and therefore
has an interest in a total of 492,223,500 Ordinary Shares and a total of
265,276,500 Convertible Preference Shares (53.2% of the issued Ordinary
Shares assuming full conversion of the Convertible Preference Shares)). 50%
of TW Holdings is owned by United Artists Programming -- Europe Inc.
("UAEP"), a wholly-owned subsidiary of Tele-Communications International,
Inc., Tele-Communications International, Inc., in turn, is a subsidiary of
TCI. UAEP, which is also referred to herein as the "TCI Affiliate," is the
registered holder of the shares owned by TW Holdings for TCI.

(3) All of the Ordinary Shares and Convertible Preference Shares that are listed
as beneficially owned by U S WEST are owned by TW Holdings (which directly
owns the 246,111,750 Ordinary Shares and 132,638,250 Convertible Preference
Shares that are listed as beneficially owned by TCI and therefore has an
interest in a total of 492,223,500 Ordinary Shares and a total of
265,276,500 Convertible Preference Shares (53.2% of the issued Ordinary
Shares assuming full conversion of the Convertible Preferences Shares)).
45.6% of TW Holdings is owned by U S WEST UK Cable, Inc. ("U S WEST UK") and
4.4% of TW Holdings is owned by U S WEST Cable Partnership Holdings, Inc.
("U S WEST Cable"). U S WEST UK and U S WEST Cable are each wholly-owned
subsidiaries of U S WEST International

2
<PAGE> 12

Holdings, Inc., which is a wholly-owned subsidiary of U S WEST. U S WEST UK
(as to 224,717,516 Ordinary Shares and 121,027,284 Convertible Preference
Shares) and U S WEST Cable (as to 21,394,234 Ordinary Shares and 11,610,966
Convertible Preference Shares) are the registered holders of the shares
owned by TW Holdings for U S WEST. U S WEST UK and U S WEST Cable are
collectively referred to herein as the "U S WEST Affiliates."

(4) All of the Ordinary Shares and the Convertible Preference Shares which are
beneficially owned by SBC Communications, Inc. ("SBC") are owned by and
registered in the name of Southwestern Bell International Holdings (UK-1)
Corporation or Southwestern Bell International Holdings (UK-2) Corporation,
which are indirect wholly-owned subsidiaries of SBC. Southwestern Bell
International Holdings (UK-1) Corporation and Southwestern Bell
International Holdings (UK-2) Corporation each hold 45,998,740 Ordinary
Shares and 57,697,552 Convertible Preference Shares. Assuming full
conversion of the Convertible Preference Shares, SBC would beneficially own
14.6% of the issued Ordinary Shares.

(5) All of the Ordinary Shares and Convertible Preference Shares which are
beneficially owned by Cox Communications, Inc. ("Cox") are owned by and
registered in the name of Cox U.K. Communications L.P., a Delaware limited
partnership comprised of indirect wholly-owned subsidiaries of Cox. Assuming
full conversion of the Convertible Preference Shares, Cox would beneficially
own 14.6% of the issued Ordinary Shares.

Voting Arrangements between the TCI Affiliate Group and the U S WEST Affiliate
Group

The TCI Affiliate and the U S WEST Affiliates have entered into a
Shareholders' Agreement, dated November 22, 1994, as amended (the "Shareholder
Agreement"), with respect to the ownership, voting and disposal of all of their
shares in the Company, including the Ordinary Shares and the Convertible
Preference Shares owned by TW Holdings. Pursuant to the Shareholder Agreement,
the TCI Affiliate Group and the U S WEST Affiliate Group have agreed that, on
any matter requiring shareholder approval, they will vote their shares together
in such manner as may be agreed by them or, in the absence of such agreement,
will vote their shares together in the manner that would most likely continue
the status quo without materially increasing the Company's financial obligations
or materially deviating from its approved budget and business plan. If either
the TCI Affiliate Group or the U S WEST Affiliate Group, as the case may be, is
precluded from voting on any matter because of a conflict of interest, the
members of the other affiliate group may vote on such matter as they deem
appropriate. As a result of these ownership and voting arrangements, the TCI
Affiliate Group and the U S WEST Affiliate Group together generally will be able
to determine the outcome of any matter requiring shareholder approval (other
than one involving a special resolution), including the election or removal of
Directors, the creation and issue of further shares and the granting of the
necessary authority to the Directors to allot any unissued shares.

Disposal and Acquisition of Ordinary and Convertible Preference Shares

Pursuant to the Shareholder Agreement, the TCI Affiliate Group and the U S
WEST Affiliate Group has each agreed that, so long as it owns in excess of 25%
of the issued Ordinary Shares, it will not transfer any of its shares of the
Company, including any owned by TW Holdings, without first offering such shares
to the other on the same terms as any proposed transfer. This right of first
offer does not apply to transfers of shares by the TCI Affiliate Group or the U
S WEST Affiliate Group to their respective affiliates. The TCI Affiliate Group
and the U S WEST Affiliate Group has each also agreed that it will not reduce
its interest in the Company to 25% or less of the issued Ordinary Shares without
the consent of the other and, in connection with any such permitted reduction,
among other things the transferee agrees to become bound by the Shareholder
Agreement. Notwithstanding the foregoing, following the fifth anniversary of the
Shareholder Agreement, each of the TCI Affiliate Group and the U S WEST
Affiliate Group will be permitted to so reduce its interest in shares in the
public market after first offering them to the other on the same terms.

The TCI Affiliate Group and the U S WEST Affiliate Group have agreed with
each other that upon a change of control of the TCI Affiliate Group or the U S
WEST Affiliate Group that results in the controlling persons (other than TCI or
U S WEST, as the case may be) of the TCI Affiliate Group or the U S WEST

3
<PAGE> 13

Affiliate Group, as the case may be, ceasing to have the power directly or
indirectly to direct the voting or disposition of at least 25% of the issued
Ordinary Shares, the party not undergoing the change of control will have an
opportunity either to consent to such change or to require the other to elect to
purchase its Ordinary Shares and Convertible Preference Shares for a specified
price or to sell its shares to the other at the same price (with such choice
being made by the party undergoing the change of control). The TCI Affiliate
Group and the U S WEST Affiliate Group have also agreed with each other that,
until the fifth anniversary of the Shareholder Agreement, without the consent of
the other, neither will acquire any additional equity interests in the Company,
other than pursuant to pre-emption rights or the anti-dilution option referred
to below.

Pursuant to the Shareholder Agreement and the Articles of Association of
the Company (the "Articles"), the rights and obligations of the TCI Affiliate
Group and the U S WEST Affiliate Group thereunder continue for so long as they
each hold 25% or more of the issued Ordinary Share capital of the Company. For
the purposes of the Shareholder Agreement and the Articles, unless otherwise
indicated, references to the percentage of Ordinary Shares owned by the TCI
Affiliate Group and the U S WEST Affiliate Group assume conversion of all the
issued Convertible Preference Shares by such groups into Ordinary Shares. In
addition, such percentages also include Ordinary Shares and Convertible
Preference Shares held by certain permitted transferees ("Permitted
Transferees") of TCI (and its affiliates) and U S WEST (and its affiliates) who
become parties to the Shareholder Agreement in accordance with the terms thereof
and with the rights and obligations thereunder and under the Articles. TCI and
its Permitted Transferees are referred to as the "TCI Affiliate Group" and U S
WEST and its Permitted Transferees are referred to as the "U S WEST Affiliate
Group."

Pursuant to a Share Dealing Agreement (the "Share Dealing Agreement"),
dated October 3, 1995, SBC and Southwestern Bell International Holdings (UK-1)
Corporation and Southwestern Bell International Holdings (UK-2) Corporation (the
"SBC Affiliates") and Cox and Cox U.K. Communications UK, L.P. (the "Cox
Affiliate") have each agreed that, subject to certain exceptions, for a period
of five years from the date of completion of the merger (the "Merger") of
Telewest Communications Cable Limited, formerly known as Telewest Communications
plc ("Old Telewest"), and SBC CableComms (UK) ("SBCC"), SBC, the SBC Affiliates
and affiliates thereof (the "SBC Affiliate Group") and Cox, the Cox Affiliate
and affiliates thereof (the "Cox Affiliate Group") will (a) not dispose of any
of their Ordinary Shares unless it offers to involve Kleinwort Benson Securities
Limited or other stockbrokers of the Company from time to time in the sale
process, whether as lead brokers or otherwise; (b) not dispose of an interest in
Ordinary Shares and/or Convertible Preference Shares amounting to in excess of
1% of the Ordinary Share capital of the Company (assuming conversion of any
Convertible Preference Shares being sold) in one sale, to a person who is a U.K.
cable television, cable telephony or satellite television operator or to a
person who is an affiliate of any such person; and (c) offer the Company (either
for itself or its nominated purchaser), TCI and U S WEST a right of first
refusal in respect of any private sale of their Ordinary Shares. The foregoing
transfer restrictions and right of first refusal do not apply to (i) any
transfer of shares by the SBC Affiliate Group or the Cox Affiliate Group to
their respective affiliates or between the SBC Affiliate Group and the Cox
Affiliate Group, (ii) any transfer by the SBC Affiliate Group to enable it to
comply with the Modification of Final Judgment entered on August 24, 1982 by the
United States District Court for the District of Columbia in connection with the
divestiture by AT&T of its local telephony business in the U.S., (iii) any
transfer accepting a third party offer for all the Ordinary Shares (including
giving an irrevocable undertaking to accept such an offer), (iv) any transfer
selling Ordinary Shares to a bona fide third party offer for all the Ordinary
Shares or (v) any transfer pursuant to an offer by either the SBC Affiliate
Group or the Cox Affiliate Group for all the Ordinary Shares.

The SBC Affiliate Group and the Cox Affiliate Group has also each agreed in
the Share Dealing Agreement that, until October 3, 2000, it will not, except in
connection with the exercise of pre-emption rights or in order to maintain its
interests in the Ordinary Shares at 10% of the issued Ordinary Shares, acquire
any additional Ordinary Shares. This restriction does not apply to transfers
between the SBC Affiliate Group and the Cox Affiliate Group.

Pursuant to the terms of the Share Dealing Agreement, when any conversion
of Convertible Preference Shares is permitted, such conversion rights will first
be made available to the TCI Affiliate Group and the U S WEST Affiliate Group to
the extent necessary to keep their collective holding of Ordinary Shares above
50%

4
<PAGE> 14

of the voting rights. Next, such rights will be made available to the SBC
Affiliate Group and the Cox Affiliate Group to the extent necessary to keep each
of their holdings of Ordinary Shares at 10% of the voting rights. No conversion
of Convertible Preference Shares will be made unless there is a need to maintain
respective voting rights at the levels referred to above or if the effect would
be to reduce the collective holding of Ordinary Shares of the TCI Affiliate
Group and the U S WEST Affiliate Group to 50% or below of the voting rights in
the Company. On any sale of Convertible Preference Shares they will
automatically convert into Ordinary Shares to the extent they are sold to the
public.

Pre-emptive Rights

Pursuant to the Companies Act, if the Company issues new equity shares for
cash, it is required to offer those shares to its existing shareholders on a
pre-emptive pro rata basis. This requirement has been waived with respect to the
antidilution option referred to below until November 29, 1999 and, in addition,
in respect of issues for cash of up to 5% of the nominal value of the issued
Ordinary Shares (in aggregate 46,378,380 Ordinary Shares) until the forthcoming
Annual General Meeting and in accordance with U.K. institutional guidelines (a
proposal to renew this waiver for cash issues is set out in Resolution #14
herein). The Company has agreed to use its best efforts (consistent with the
interests of shareholders generally) to ensure that any issue of shares is made
in such a manner so as to provide existing shareholders with an opportunity to
acquire additional shares and thereby avoid a dilution of the interests in the
Company of the TCI Affiliate, the U S WEST Affiliates, the SBC Affiliates and
the Cox Affiliate.

In addition, for so long as the TCI Affiliate Group and the U S WEST
Affiliate Group collectively own at least 50.1% of the issued Ordinary Shares
(including those issuable on conversion of the Convertible Preferences Shares)
they will each have an option (an "Anti-dilution Option"), exercisable upon the
issue of Ordinary Shares by the Company other than for cash, or, if for cash,
other than pursuant to a pre-emptive offering, to enable them to maintain their
collective ownership of Ordinary Shares at 50.1% of the issued Ordinary Shares.
The Anti-dilution Option grants the TCI Affiliate Group and the U S WEST
Affiliate Group the right to purchase (at the time of the dilutive event)
additional newly issued Ordinary Shares for cash at a purchase price per share
based on the average of the prices quoted on the London Stock Exchange for the
ten days ending on the day preceding the day on which the Anti-dilution Option
is exercised, and is exercisable only in the event that the collective ownership
of Ordinary Shares held by the TCI Affiliate Group and the U S WEST Affiliate
Group might otherwise have been reduced to 50% or below of the issued Ordinary
Shares as a result of the Company's proposed issue of such shares other than for
cash or if for cash, other than pursuant to a pre-emptive offering. In order for
the TCI Affiliate Group and the U S WEST Affiliate Group to exercise the
Anti-dilution Option, they must first have converted all Convertible Preference
Shares held by them into Ordinary Shares to the extent such Convertible
Preference Shares are then convertible. The TCI Affiliate Group and the U S WEST
Affiliate Group have agreed with each other that they will exercise any rights
to subscribe for new Ordinary Shares (including pursuant to pre-emptive rights
and the Anti-dilution Option) to the extent necessary to ensure that each
Affiliate Group owns at least 25% of the issued Ordinary Shares.

Registration Rights

The Company has agreed that the TCI Affiliate, the U S WEST Affiliates, the
SBC Affiliates and the Cox Affiliate will have the right, subject to certain
limited exceptions, to require the Company to include all or any portion of
their Ordinary Shares (including those arising from a conversion of Convertible
Preference Shares on any sale to the "public") in any registered offering by the
Company of Ordinary Shares under the U.S. Securities Act of 1933, as amended
(the "Securities Act"), or in a public offering under U.K. law. In addition, the
TCI Affiliate, the U S WEST Affiliates, the SBC Affiliates and the Cox Affiliate
will have the right to cause the Company on up to eight separate occasions (two
exercisable by each of the TCI Affiliate, the U S WEST Affiliates, the SBC
Affiliates and the Cox Affiliate) to offer all or any part of their Ordinary
Shares for sale in a registered offering under the Securities Act or in a public
offering under U.K. law.

5
<PAGE> 15

Limitations on Scope of Business and Assets Sales

In connection with the initial public offering of Old Telewest in November
1994 (the "Initial Public Offering") and the Merger, the Company and affiliates
of TCI, U S WEST, SBC and Cox entered into various agreements which provide,
among other things, for certain restrictions on the scope of business of the
parties thereto (and certain affiliates thereof) and also require the consent of
the TCI Affiliate Group, the U S WEST Affiliate Group, the SBC Affiliate Group
and the Cox Affiliate Group for certain dispositions of assets of the Company in
limited circumstances. In addition, one of the Company's principal bank credit
facilities provides that it is an event of default if the beneficial ownership
of TCI and U S WEST decreases below certain specified levels under certain
circumstances.

PROPOSALS FOR SHAREHOLDER ACTION

ADOPTION OF 1996 DIRECTORS' REPORT AND ACCOUNTS
(RESOLUTION #1 ON THE PROXY CARD)

In accordance with the Companies Act, at the Annual General Meeting, the
Board of Directors will present for shareholder adoption the Directors' Report
and Accounts of the Company for the year ended December 31, 1996, a copy of
which is included in the Company's Annual Report for 1996 that accompanies this
Proxy Statement. THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR ADOPTION OF
THE 1996 DIRECTORS' REPORT AND ACCOUNTS.

APPOINTMENT OF DIRECTORS
(RESOLUTION #2 THROUGH #12 ON THE PROXY CARD)

The Articles provide that the Board of Directors shall consist of no less
than two directors and no more than twelve directors. The Articles provide that
so long as the TCI Affiliate Group owns 25% or more of the outstanding Ordinary
Shares and the U S WEST Affiliate Group owns 25% or more of the outstanding
Ordinary Shares, the Board shall consist of two representatives designated by
the TCI Affiliate Group and two representatives designated by the U S WEST
Affiliate Group. For these purposes, each of the TCI Affiliate Group and the U S
WEST Affiliate Group shall be deemed to own 50% of the Ordinary Shares owned by
TW Holdings. The Articles also provide that for so long as the SBC Affiliate
Group owns a Qualifying Interest of the issued Ordinary Shares, the SBC
Affiliate Group will be entitled to appoint (and remove) one person as a
Director, and that for so long as the Cox Affiliate Group owns a Qualifying
Interest of the issued Ordinary Shares, the Cox Affiliate Group will be entitled
to appoint (and remove) one person as a Director. A Qualifying Interest shall be
8.33% or more of the Ordinary Shares or, following any Dilutive Issue (as
defined below), 5% or more of the Ordinary Shares; provided, however, that
immediately prior to such Dilutive Issue, the SBC Affiliate Group or the Cox
Affiliate Group, as the case may be, held 8.33% or more of the Ordinary Shares.
For purposes of the foregoing, "Dilutive Issue" means any issue of Ordinary
Shares or other securities (including securities convertible into or
exchangeable for Ordinary Shares or other securities) of the Company in respect
of which the SBC Affiliate Group or the Cox Affiliate Group, as the case may be,
is not entitled by the terms of such issue to participate on a pro-rata basis.

As a condition to the continued listing of the Ordinary Shares on the
London Stock Exchange, the Company must demonstrate its "independence" from any
"controlling shareholder" (defined as a shareholder owning more than 30% of the
outstanding voting shares of the Company). TCI and its affiliates and U S WEST
and its affiliates are "controlling shareholders." To comply with the
independence requirement, the Company must demonstrate that all "significant"
decisions can be made by a majority of directors who are independent from TCI
and its affiliates and U S WEST and its affiliates as controlling shareholders.
Consequently, a majority of the Company's Board of Directors needs to be
independent of TCI and its affiliates and U S WEST and its affiliates. Each of
the TCI Affiliate Group and the U S WEST Affiliate Group has agreed that so long
as they collectively own more than 50%, or individually own more than 30%, in
each case, of the outstanding Ordinary Shares, they will use their best efforts
to ensure that a majority of the directors are independent of TCI and U S WEST
and their respective affiliates within the meaning of the London Stock Exchange
Rules.

6
<PAGE> 16

Consistent with the foregoing requirements, the Board of Directors has
nominated each of the persons listed below (all of whom currently are directors
of the Company) for appointment as a director. If one or more of the nominees
should become unavailable or unable to serve at the time of the Annual General
Meeting, the shares to be voted for such nominee or nominees which are
represented by proxies will be voted for any substitute nominee or nominees
designated by the Board or, if none, a vacancy will be maintained until filled
by the Board. The Board knows of no reason why any of the nominees will be
unavailable or unable to serve at the time of the Annual General Meeting.

Directors appointed at the Annual General Meeting will hold office until
the next Annual General Meeting or until their successors have been elected and
qualified. The following is a brief listing of the principal occupations for at
least the past five years, certain other significant affiliations and the age as
of March 1, 1997 for each of the nominees.

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPOINTMENT OF EACH OF
THE DIRECTORS NOMINATED BY THE BOARD.

Nominees for Appointment as Directors
(To serve until the Annual General Meeting in 1998)

FRED A. VIERRA

Mr. Vierra has served as the non-executive Chairman of the Board of the
Company since April 1994 and served on the Executive Committee of the joint
venture that was a predecessor business of the Company (the "Joint Venture")
from its formation in December 1991 until the Joint Venture was acquired by the
Company in November 1994 in connection with the Initial Public Offering. He is
an Executive Vice President of TCI and is responsible for international cable
operations and international programming. Mr. Vierra has served in this position
with TCI (and its predecessor company) since December 1991. Mr. Vierra is also
the Vice Chairman and the Chief Executive Officer of Tele-Communications
International, Inc. and has served in these positions since May 1995 and October
1994, respectively. From October 1994 to May 1995, Mr. Vierra served as Chairman
of the Board of Tele-Communications International, Inc. Previously, Mr. Vierra
was President, Chief Operating Officer and a director of United Artists
Entertainment Company (and a predecessor company) from May 1989 to December
1991, where he managed all day-to-day operations and strategies. Mr. Vierra also
serves as Chairman of TeleWest Europe Group (a joint venture between TCI and U S
WEST which operates cable television networks in Norway, Sweden and Hungary) and
as a non-executive director of Flextech plc (a provider of television
programming). Age 65.

ANTHONY W.P. STENHAM

Mr. Stenham has served as a non-executive director and Deputy Chairman of
the Board of the Company since November 1994 and has served as a consultant to
the Executive Committee of the Joint Venture from May 1994 until the Joint
Venture was acquired by the Company in November 1994 in connection with the
Initial Public Offering. He is Chairman of Arjo Wiggins Appleton plc (a
manufacturer and distributor of paper products) and has served in such position
since 1990. Previously, Mr. Stenham was a Managing Director of Bankers Trust
Company from 1986 to 1990. Mr. Stenham serves as a non-executive director of
various companies including The Rank Organisation plc (an entertainment
company), Standard Chartered PLC (a commercial bank) and Unigate PLC (a
manufacturer and distributor of dairy products). Age 65.

7
<PAGE> 17

A. GARY AMES

Mr. Ames has served as a non-executive director of the Company since
November 1995. He is the President and Chief Executive Officer of U S WEST
International Inc., based in London, responsible for the U S WEST Media Group's
international operations. Mr. Ames has served in this position since July 1995.
Previously, from January 1990 to June 1995 Mr. Ames was President and Chief
Executive Officer of U S WEST Communications (a provider of residential and
business telephone services in the U.S.). Mr. Ames also serves as a director of
Albertsons Inc. and Tektronics Inc. and as a non-executive director of Flextech.
Age 52.

JOHN H. ATTERBURY III

Mr. Atterbury was appointed to serve as a non-executive director of the
Company upon completion of the Merger in October 1995. He has been the President
and Chief Executive Officer -- SBC International Operations since July 1995,
prior to which he was President of SBC's Telemex operations from January 1991 to
June 1995. Mr. Atterbury was the President and Chief Executive Officer of
Southwestern Bell Telecom from October 1988 to December 1990. Mr. Atterbury is
also a director of Telefonos de Mexico (a Mexican telephone company), VTR S.A.
(a Chilean communications company), Transcall (a French cellular telephone
company) and Andocs Inc. (a software development company). Age 48.

LORD BORRIE QC

Lord Borrie QC has served as a non-executive director of the Company since
November 1994 and has served as a consultant to the Executive Committee of the
Joint Venture from May 1994 until the Joint Venture was acquired by the Company
in November 1994 in connection with the Initial Public Offering. He was
President of the Institute of Trading Standards Administration from 1992 to 1996
and the Director General of the Office of Fair Trading from 1976 to 1992. Lord
Borrie also serves as a non-executive director of The Mirror Group plc (a media
company which has an interest in Live TV (as discussed below)), the Woolwich plc
(a financial institution) and Three Valleys Water plc. Age 65.

CHARLES J. BURDICK

Mr. Burdick has served as Acting Chief Financial Officer of the Company
since September 1996 and was appointed Finance Director in February 1997. He was
Vice President Finance and Assistant Treasurer at U S WEST from 1990 to October
1996. Prior to joining U S WEST, Mr. Burdick worked in Treasury and Corporate
Development positions at, inter alia, Time Warner and Carnation International.
Age 45.

STEPHEN J. DAVIDSON

Mr. Davidson has served as a director of the Company since April 1994. He
was appointed Chief Executive Officer of the Company in February 1997 and had
been Acting Chief Executive Officer since August 1996 and the Finance Director
of the Company since January 1993. Previously, he worked for four years at
Bankers Trust Company in London where he was a Managing Director with
responsibility for clients in the media business throughout Europe. Age 41.

LORD GRIFFITHS OF FFORESTFACH

Lord Griffiths has served as a non-executive director of the Company since
November 1994 and has served as a consultant to the Executive Committee of the
Joint Venture since May 1994 until the Joint Venture was acquired by the Company
in November 1994 in connection with the Initial Public Offering. He is an
International Advisor at Goldman Sachs International and has served in this
position since 1991. Previously, Lord Griffiths served as Head of the Prime
Minister's Policy Unit from 1985 to 1990. From 1984 to 1986, he was a Director
of The Bank of England. Lord Griffiths currently serves as a non-executive
director of Herman Miller Inc. (a manufacturer and distributor of furniture),
Times Newspaper Holdings Ltd, Servicemaster Limited (a provider of consumer
maintenance services and management maintenance services to homeowners and
commercial facilities) and English, Welsh and Scottish Railways (a freight rail
company). Age 54.

8
<PAGE> 18

CHARLES M. LILLIS

Mr. Lillis has served as a non-executive director of the Company since
April 1994 and has served on the Executive Committee of the Joint Venture from
April 1993 until the Joint Venture was acquired by the Company in November 1994
in connection with the Initial Public Offering. Mr. Lillis is the President and
Chief Executive Officer of U S WEST Media Group and has served in this position
since November 1995. He also is Executive Vice President of U S WEST, having
served in this position since 1987. Mr. Lillis also is a member of the Board of
Representatives of Time Warner Entertainment Company, L.P. Age 55.

JAMES O. ROBBINS

Mr. Robbins was appointed to serve as a non-executive director of the
Company upon completion of the Merger in October 1995. He is the President and
Chief Executive Officer of Cox, having served as the President of the Cable
Division of Cox Enterprises Inc. from 1985 until 1995 and the Chief Executive
Officer from January 1995. He is a past chairman of the U.S. National Cable
Television Association and currently serves on its executive committee. He is
also a director of Teleport Communications Group and NCR Corporation and
Chairman of the 1995 Policy Owners Examining Committee of Northwest Mutual Life
Insurance Company. Age 54.

ADAM N. SINGER

Mr. Singer has served as a non-executive director of the Company since
November 1995. He is the President and Chief Operating Officer of
Tele-Communications International, Inc., responsible for the management and
development of its international cable, telephony and programming operations,
having served in this position since October 1994. Previously, Mr. Singer was
Vice President-International of TCI (and its predecessor company) from June 1992
to October 1994 and President and Chief Executive Officer of United Artists
Entertainment (Programming) Limited from September 1988 to June 1992. Mr. Singer
is a director of Tele-Communications International, Inc. and Scottish Television
plc and a non-executive director of Flextech. Age 45.
------------------------------

In accordance with the terms of the Articles and the Shareholder Agreement,
Mr. Vierra and Mr. Singer have been designated to serve as directors by the TCI
Affiliate Group and Mr. Ames and Mr. Lillis have been designated to serve as
directors by the U S WEST Affiliate Group. In the Shareholder Agreement, each of
the TCI Affiliate Group and the U S WEST Affiliate Group has agreed that on any
matter requiring Board approval, it will cause the directors designated by it to
vote together as agreed by them (subject to each director's fiduciary duties to
the Company and to minority shareholders of the Company) or, in the absence of
such agreement, to vote together in the manner that would be most likely to
continue the status quo without materially increasing the Company's financial
obligations or materially deviating from its approved budget and business plan.
If either the TCI Affiliate Group or the U S WEST Affiliate Group (as the case
may be) is precluded from voting on any matter because of a conflict of
interest, the designees of the other Affiliate Group may vote on such matter as
they deem appropriate.

In accordance with the terms of the Articles, Mr. Atterbury and Mr. Robbins
have been designated to serve as directors by the SBC Affiliate Group and the
Cox Affiliate Group, respectively.

Board Meetings

Regular meetings of the Board of Directors of the Company are scheduled to
be held at least four times during the year and special meetings will be
scheduled when required. The Board held five meetings in 1996. No incumbent
Director attended fewer than 75% of the total number of meetings of the Board
and all Committees of the Board on which such Director served. Directors meet
their responsibilities not only by attending Board and Committee meetings, but
also through communication with members of management on matters affecting the
Company.

9
<PAGE> 19

Board Committees

The Board has established an Audit Committee and a Remuneration Committee
to assist it in meeting its responsibilities.

The Audit Committee is responsible for reviewing and monitoring the
Company's accounting policies and financial reporting. Regular meetings of the
Audit Committee are scheduled at least four times during the year and special
meetings are scheduled when required (6 meetings were held in 1996). Pursuant to
the Articles and the Shareholder Agreement, the Audit Committee is comprised of
the Company's three independent non-executive directors and, based on current
share ownership levels, one designee from each of the TCI Affiliate Group, the U
S WEST Affiliate Group and the SBC Affiliate Group/the Cox Affiliate Group. The
TCI Affiliate Group has agreed that, for so long as the SBC Affiliate Group/the
Cox Affiliate Group retain the right to appoint one representative to the Audit
Committee, the TCI Affiliate Group will not exercise its right to have one
designee on the Audit Committee. The Company has agreed that for the period
during which the TCI Affiliate Group has a right to appoint a representative to
the Audit Committee but does not so exercise it, the TCI Affiliate Group will be
able to appoint an observer to attend meetings of the Audit Committee. Mr.
Stenham, Lord Borrie and Lord Griffiths currently serve as the independent
non-executive director representatives, Mr. Ames and Mr. Atterbury currently
serve as the representatives of the U S WEST Affiliate Group and the SBC
Affiliate Group/the Cox Affiliate Group, respectively, and Mr. Vierra currently
is the observer appointed by the TCI Affiliate Group. Mr. Stenham is the
Chairman of the Audit Committee.

The Remuneration Committee is responsible for reviewing and approving the
remuneration and other terms of employment of the executive directors and senior
executives, as well as for determining or recommending the level of
participation for all the Company's employees in the Company's share and other
incentive plans. Regular meetings of the Remuneration Committee are scheduled
twice during the year and special meetings are scheduled when required (6
meetings were held in 1996). Pursuant to the Articles and the Shareholder
Agreement, the Remuneration Committee is comprised of one of the Company's
independent non-executive directors and, based on current share ownership
levels, one designee from each of the TCI Affiliate Group and the U S WEST
Affiliate Group. In addition, based on current share ownership levels, the SBC
Affiliate Group and the Cox Affiliate Group each has the right to appoint one
observer to the Remuneration Committee. Mr. Stenham currently serves as the
independent non-executive director representative and Mr. Singer and Mr. Ames
currently serve as the representatives of the TCI Affiliate Group and U S WEST
Affiliate Group, respectively. Mr. Atterbury and Mr. Robbins currently serve as
the observers for the SBC Affiliate Group and the Cox Affiliate Group,
respectively. Mr. Ames is the Chairman of the Remuneration Committee.

Compensation of Non-Executive Directors

The independent non-executive directors (other than the Deputy Chairman of
the Board) receive an annual payment of L20,000. The Deputy Chairman of the
Board receives an annual payment of L35,000. Each independent non-executive
director also receives L1,000 for each Board and committee meeting attended and
reimbursement for reasonable expenses incurred in the performance of his duties
as a director.

No compensation is paid to any of the other non-executive directors or to
any of the executive directors for their service as directors.

ALLOCATION OF SECURITIES

(RESOLUTION #13 ON THE PROXY CARD)

Under the Companies Act, directors may not allot (i.e., issue) shares
unless they are authorized to do so by an ordinary resolution of the
shareholders of the company or under the articles of association of such
company. At the Annual General Meeting, the Board of Directors will present the
resolution set out below, which provides the Directors with the authority to
allot up to 309,189,200 Ordinary Shares (representing approximately one third of
the Company's current issued ordinary share capital), which number of shares is
in accordance with U.K. institutional guidelines. This authority will lapse 15
months after the Annual General Meeting or at the conclusion of the 1998 Annual
General Meeting, whichever occurs first.

10
<PAGE> 20

TEXT OF RESOLUTION:

THAT in substitution for all previous authorities which are hereby
revoked, the Directors be generally and unconditionally authorized
pursuant to Section 80 of the Companies Act 1985 (the "Act") to exercise
all or any powers of the Company to allot relevant securities (within
the meaning of Section 80(2) of the Act) up to an aggregate nominal
amount of L30,918,920 such authority to expire (unless previously
renewed, varied or revoked by the Company in a general meeting) on the
earlier of August 8, 1998 or the conclusion of the Annual General
Meeting of the Company to be held in 1998, but the Company may make an
offer or agreement which would or might require relevant securities to
be allotted after the expiry of this authority and the Directors may
allot relevant securities in pursuance of that offer or agreement.

Notwithstanding the foregoing resolution authorizing the Directors to issue
additional securities under certain circumstances without shareholder approval,
the rules of the Nasdaq National Market may require the Company to seek further
shareholder approval for certain such issuances in the future.

THE BOARD RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR APPROVAL OF THE
RESOLUTION BECAUSE IT BELIEVES THAT IT IS IN THE COMPANY'S BEST INTEREST FOR THE
DIRECTORS TO HAVE THE FLEXIBILITY OF ALLOTTING SHARES AS PROVIDED THEREUNDER,
ALTHOUGH THEY HAVE NO PRESENT INTENTION OF DOING SO.

DISAPPLICATION OF PRE-EMPTION RIGHTS
(RESOLUTION #14 ON THE PROXY CARD)

At the Annual General Meeting, the Board of Directors will present the
resolution set out below, which provides the Directors with the authority to
allot shares for cash without first offering such shares pro rata to existing
shareholders, as otherwise required by the Companies Act. The limited authority
conferred by such resolution would empower the Directors to make such cash
issues other than pro rata to shareholders provided such issues did not exceed
in aggregate 46,378,380 shares (representing 5% of the Company's current issued
ordinary share capital), which number of shares is in accordance with U.K.
institutional guidelines. This authority will lapse 15 months after this Annual
General Meeting or at the conclusion of the 1998 Annual General Meeting,
whichever occurs first. The effectiveness of this Resolution is conditional on
the approval by the shareholders of Resolution #13.

TEXT OF RESOLUTION:

THAT in substitution for all previous authorities which are hereby
revoked, and subject to the passing of Resolution 13, the Directors
be empowered pursuant to Section 95 of the Companies Act 1985 (the
"Act") to allot equity securities (within the meaning of Section
94(2) of the Act) for cash pursuant to the authority conferred by
Resolution 13 as if Section 89(1) of the Act did not apply to any
such allotment. This power:

(i) expires on the earlier of August 8, 1998 and the conclusion of
the Annual General Meeting of the Company to be held in 1998, but the
Company may make an offer or agreement which would or might require
equity securities to be allotted after the expiry of this authority
and the Directors may allot equity securities in pursuance of that
offer or agreement; and

(ii) is limited to:

A. allotments of equity securities where such securities have been
offered (whether by way of a rights issue, open offer or otherwise)
to holders of ordinary shares of 10p each in the capital of the
Company ("Ordinary Shares") and, if in accordance with their rights,
the Directors so determine, to holders of other equity securities of
any class, in proportion (as nearly as may be) to their existing
holdings of Ordinary Shares or (as the case may be) other equity
securities of the class on the basis of their rights to receive such
offer or, failing which, on the basis that their holdings have been
converted into or that they have subscribed for Ordinary Shares on
the basis then applicable, subject to the Directors having a right to
make such exclusions or other arrangements in connection with the
offer as they deem necessary or expedient:

11
<PAGE> 21

(a) to deal with equity securities representing fractional
entitlements; and

(b) to deal with legal or practical problems under the laws of, or
the requirements of any recognized regulatory body or any stock
exchange in any territory; and

B. allotments of equity securities for cash otherwise than pursuant to
paragraph A up to an aggregate nominal amount of L4,637,838.

APPOINTMENT OF AUDITORS AND AUTHORIZATION FOR DIRECTORS TO FIX
REMUNERATION
(RESOLUTION #15 ON THE PROXY CARD)

The Board of Directors, upon the recommendation of the Audit Committee, has
recommended that KPMG Audit plc, a limited liability company wholly-owned by
KPMG, be appointed as auditors, to serve from the conclusion of the forthcoming
Annual General Meeting until the next annual general meeting. The Board intends
to fix the remuneration of the auditors for such period after their appointment.
At the Annual General Meeting, the Board of Directors will present for
shareholder approval a resolution appointing KPMG Audit plc as auditors and
authorizing the Board to fix the remuneration for the auditors. THE BOARD
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR SUCH APPOINTMENT AND AUTHORIZATION TO
FIX REMUNERATION.

Representatives of KPMG and KPMG Audit plc are expected to be present at
the Annual General Meeting. Such representatives will have the opportunity to
make a statement if they desire to do so and will be available to respond to
appropriate questions from shareholders.

ADOPTION OF TWO NEW SHARE SCHEMES

(RESOLUTIONS #16 AND #17 ON THE PROXY CARD)

In connection with the Initial Public Offering, the Company adopted a
restricted share scheme to replace a then existing cash bonus scheme. The
initial awards made under that share scheme generally vest in January 1998. To
provide additional incentives beyond 1998, the Company proposes to adopt two new
schemes: (a) an equity participation plan to enable employees to purchase
ordinary shares using their annual cash performance related bonus, with the
Company matching the employee purchases with an award of shares (the "EPP") and
(b) a long term incentive scheme to provide for additional share grants (the
"LTIP"). These plans are described in more detail in the Appendix to the Notice
of Annual General Meeting accompanying this document. Under the rules of the
London Stock Exchange and the Nasdaq National Market, the plans require
shareholder approval as provided in Resolution #16 (with respect to the EPP) and
Resolution #17 (with respect to the LTIP). At the Annual General Meeting, the
Board will present for shareholder approval resolutions proposing the adoption
of two new share schemes and the Board recommends that the shareholders vote FOR
these schemes.

INCREASE IN BORROWING LIMIT
(RESOLUTION #18 ON THE PROXY CARD)

The Articles of Association of the Company include a limit on the amount
the Company may borrow. The current limitation provides that the borrowings of
the Company shall not exceed the greater of L2,000,000,000 and four times the
adjusted capital and reserves (as defined in the Articles of Association). Given
the considerable expansion of the Company's operations, the Company believes it
would be prudent to increase the borrowing powers under the Articles of
Association to the greater of L4,000,000,000 and five times the adjusted capital
and reserves. Under the Articles of Association, this change requires
shareholder approval. AT THE ANNUAL GENERAL MEETING, THE BOARD WILL PRESENT FOR
SHAREHOLDER APPROVAL A RESOLUTION TO INCREASE THE BORROWING POWERS AND
RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE RESOLUTION.

12
<PAGE> 22

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information known to the Company
with respect to Ordinary Shares beneficially owned, as of March 1, 1997, by each
director, director nominee and named executive officer and all directors and
executive officers as a group. Each of the persons named in the table have sole
voting and investment power with respect to all Ordinary Shares indicated as
being beneficially owned by them.

<TABLE>
<CAPTION>
NUMBER OF PERCENT OF
ORDINARY OUTSTANDING
SHARES ORDINARY
NAME OWNED SHARES
- ---------------------------------------------------------------- ---------- ----------
<S> <C> <C>
A. Gary Ames.................................................... -- --
John H. Atterbury III........................................... -- --
Lord Borrie, QC................................................. -- --
Charles Burdick................................................. 20,000(1) (2)
Stephen J. Davidson............................................. -- --
Lord Griffiths of Fforestfach................................... -- --
Simeon Galpert.................................................. -- --
Bruce D. Langham................................................ 2,747 (2)
Charles M. Lillis............................................... -- --
Alan Michels.................................................... -- --
Lynn C. Rexroth................................................. 3,500(1) (2)
James O. Robbins................................................ -- --
Anthony W. P. Stenham........................................... -- --
Adam N. Singer.................................................. -- --
Fred A. Vierra.................................................. -- --
Roger P. Wilson................................................. -- --
All Directors and Executive Officers (as a group)............... 26,521 (2)
</TABLE>

- ------------------------

Notes.

1. In the form of American Depository Receipts.
2. Represents less than 0.01% of the Company's outstanding Ordinary Shares.

13
<PAGE> 23

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE(1)

<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION ---------------------------
------------------------------------ RESTRICTED SECURITIES
OTHER ANNUAL STOCK(2) UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
- -------------------------- ---- -------- -------- ------------ ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Stephen J. Davidson 1996 L235,756 L 25,500 L 11,903(3) -- 107,579 L 12,599(4)
Chief Executive Officer 1995 L143,100 L 98,312 L 11,443(3) L819,691(5) 178,380 L 10,017
1994 L135,000 L 79,520 L 10,974(3) -- -- L 9,188
Alan Michels(6) 1996 L100,542 -- L 67,358(7) -- 164,564 L544,137(8)
Former Chief Executive 1995 L160,348 L120,765 L266,574(7) L750,008(9) 183,437 L 4,828
Officer 1994 L139,579 L 87,834 L304,813(7) -- -- L 38,403

Lynn C. Rexroth(10) 1996 L175,000 L 17,093 L143,660(11) L 63,584 104,280 L 4,808(12)
Chief Operations Officer 1995 L 84,969 L 59,649 L166,274(11) L119,957(13) 107,882 L 4,827
1994 L 82,922 L 25,575 L139,037(11) -- -- L 5,377

Simeon Galpert(14) 1996 L111,138 L 28,726 L 9,108(15) -- 56,383 L 7,780(16)
Senior Vice President of 1995 L103,432 L 33,153 L 9,269(15) L176,825(17) 116,618 L 7,000
Finance 1994 L 57,192 L 7,272 L 5,504(15) -- -- L 4,083

Roger P. Wilson(18) 1996 L 98,000 L 9,155 L 8,479(19) -- 139,007 L 11,760(20)
Senior Vice President of 1995 L 83,970 L108,132 L 7,350(19) L 98,710(21) -- L 10,076
Residential Services

Bruce Langham 1996 L 98,000 L 12,204 L 11,614(22) -- 52,128 L 9,310(23)
Senior Vice President of 1995 L 91,333 L 26,030 L 11,445(22) L237,755(24) 104,956 L 7,405
Digital Services 1994 L 77,833 L 9,827 L 7,599(22) -- -- L 5,214
</TABLE>

- ---------------

1. Certain amounts reflected in this table and elsewhere in this section were
paid in US dollars, but are represented in this table in pounds sterling
based on an exchange rate of $1.56 to L1.00, which represents the average
of the spot closing rate as published by the Financial Times for the year
ended December 31, 1996.

2. The value of the Restricted Stock reflected in this table represents the
product of the number of Ordinary Shares underlying the award multiplied by
the closing price per Ordinary Share of the Ordinary Shares on the London
Stock Exchange on the date of the grant (January 24, 1996 (132.5p) in the
case of Restricted Share awards granted to Mr. Rexroth on that date,
November 8, 1995 (175.0p) in the case of Restricted Share awards granted to
Mr. Wilson on that date and January 13, 1995 (172.5p) in the case of all
other Restricted Share awards).

3. Mr. Davidson's "Other Annual Compensation" includes L11,060, L10,322 and
L10,157 for an automobile and related expenses for the years 1996, 1995 and
1994, respectively.

4. Mr. Davidson's "All Other Compensation" consists of payments made by the
Company to his private pension plan.

5. On January 13, 1995 Mr. Davidson was granted an award of 475,183 shares of
Restricted Stock. As of December 31, 1996, the aggregate value of such
shares was L589,227 based on a price per Ordinary Share of 124p (the
closing price per Ordinary Share of the Ordinary Shares on the London Stock
Exchange on December 31, 1996). Such shares vest and will be distributed to
Mr. Davidson (without payment of consideration) on January 13, 1998,
subject to earlier vesting and distribution under certain circumstances.
Until such shares are vested, Mr. Davidson will not be entitled to vote or
receive dividends in respect of such shares.

6. Mr. Michels served as a Director and Chief Executive Officer from January
1, 1994 to July 31, 1996. As described below under "-- Employment
Agreements," certain amounts reflected in this table for Mr. Michels were
paid by an affiliate of U S WEST, which was reimbursed by the Company for
all such payments.

7. Mr. Michels' "Other annual compensation" includes provisions of L9,841,
L144,771 and L223,060 in respect of his UK income taxes for 1996, 1995 and
1994, respectively, housing allowances of L50,638, L62,962 and L49,386 for
1996, 1995 and 1994, respectively, and automobile and related expenses of
L6,743, L11,310 and L8,362 for 1996, 1995 and 1994, respectively.

8. Mr. Michels' "All other compensation" includes a L539,329 termination
payment paid or payable in connection with Mr. Michels' resignation and a
L4,808 matching contribution to his 401(k) plan.

9. On January 13, 1995 Mr. Michels was granted an award of 434,787 shares of
Restricted Stock. As of December 31, 1996, the aggregate value of such
shares was L539,136 based on a price per Ordinary Share of 124p (the
closing price per Ordinary Share of the Ordinary Shares on the London Stock
Exchange on December 31, 1996). Such shares vested pursuant to the Rules of
the Restricted Stock Scheme and arrangements with the Company in connection
with his resignation.

10. Mr. Rexroth is a secondee to the Company from U S WEST and consequently, as
described below under "-- Employment Agreements", certain amounts reflected
in this table for Mr. Rexroth were paid by an affiliate of U S WEST, which
was reimbursed by the Company for all such payments.

14
<PAGE> 24

11. Mr. Rexroth's "Other Annual Compensation" includes provisions of L74,253,
L102,968 and L91,629 in respect of his UK income taxes for the years 1996,
1995 and 1994, respectively, and L30,462, L32,496 and L32,496 in respect of
housing allowances for 1996, 1995 and 1994, respectively.

12. Mr. Rexroth's "All Other Compensation" represents matching contributions to
his 401(k) plan.

13. On January 24, 1996 and January 13, 1995 Mr. Rexroth was granted an award
of 47,988 and 69,540 shares, respectively, of Restricted Stock. As of
December 31, 1996, the aggregate value of such shares was L145,735 based on
a price per Ordinary Share of 124p (the closing price per Ordinary Share of
the Ordinary Shares on the London Stock Exchange on December 31, 1996).
Such shares vest and will be distributed to Mr. Rexroth (without payment of
consideration) on January 24, 1999 (in the case of the 47,988 shares) and
January 13, 1998 (in the case of the 69,540 shares), respectively, subject
to earlier vesting and distribution under certain circumstances. Until such
shares are vested, Mr. Rexroth will not be entitled to vote or receive
dividends in respect of such shares.

14. Mr. Galpert commenced employment with the Company on June 6, 1994 and
resigned effective as of March 31, 1997.

15. Mr. Galpert's "Other Annual Compensation" includes L8,394, L8,334 and
L4,864 for an automobile and related expenses for the years 1996, 1995 and
1994, respectively.

16 Mr. Galpert's "All Other Compensation" consists of payments made by the
Company to his private pension plan.

17. On January 13, 1995 Mr. Galpert was granted an award of 102,507 shares of
Restricted Stock. As of December 31, 1996, the aggregate value of such
shares was L127,109 based on a price per Ordinary Share of 124p (the
closing price per Ordinary Share of the Ordinary Shares on the London Stock
Exchange on December 31, 1996). Such shares will vest on March 31, 1997 on
a pro rata basis up to such date, pursuant to the Rules of the Restricted
Stock Scheme and arrangements with the Company in connection with his
resignation. Until such shares are vested, Mr. Galpert will not be entitled
to vote or receive dividends in respect of such shares.

18. Mr. Wilson commenced employment with the Company upon completion of the
Merger on October 3, 1995. Amounts reflected for Mr. Wilson prior to
completion of the Merger were paid by former SBCC.

19. Mr. Wilson's "Other Annual Compensation" includes L7,779 and L6,731 for
automobile and related expenses for the years 1996 and 1995, respectively.

20. Mr. Wilson's "All Other Compensation" consists of payments made by the
Company to his private pension plan.

21. On November 8, 1995 Mr. Wilson was granted an award of 56,406 shares of
Restricted Stock. As of December 31, 1996, the aggregate value of such
shares was L69,943 based on a price per Ordinary Share of 124p (the closing
price per Ordinary Share of the Ordinary Shares on the London Stock
Exchange on December 31, 1996). Such shares vest and will be distributed to
Mr. Wilson (without payment of consideration) on November 8, 1998, subject
to earlier vesting and distribution under certain circumstances. Until such
shares are vested, Mr. Wilson will not be entitled to vote or receive
dividends in respect of such shares.

22. Mr. Langham's "Other Annual Compensation" includes L10,697, L10,637 and
L6,606 for automobile and related expenses for the years 1996, 1995 and
1994, respectively.

23. Mr. Langham's "All Other Compensation" consists of payments made by the
Company to his private pension plan.

24. On January 13, 1995 Mr. Langham was granted an award of 137,829 shares of
Restricted Stock. As of December 31, 1996, the aggregate value of such
shares was L170,908 based on a price per Ordinary Share of 124p (the
closing price per Ordinary Share of the Ordinary Shares on the London Stock
Exchange on December 31, 1996). Such shares vest and will be distributed to
Mr. Langham (without payment of consideration) on January 13, 1998, subject
to earlier vesting and distribution under certain circumstances. Until such
shares are vested, Mr. Langham will not be entitled to vote or receive
dividends in respect of such shares.

15
<PAGE> 25

OPTION GRANT TABLE

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED OPTION TERM
OPTIONS TO EMPLOYEES EXERCISE --------------------
NAME GRANTED IN 1996 PRICE(1) EXPIRATION DATE 5% 10%
- ----------------------------- ----------- -------------- --------- ------------------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
Stephen J. Davidson.......... 21,277(2) 0.52% 141.0p March 10, 2006 L17,827 L46,158
86,302(3) 2.09% 141.0p March 10, 2006 L72,310 L187,221
Alan Michels................. 21,277(2) 0.52% 141.0p September 10, 1999(4) L17,827 L46,158
95,745(3) 2.32% 141.0p September 10, 1999(4) L80,222 L207,706
47,542(3) 1.15% 138.0p September 10, 1999(4) L41,260 L104,562
Lynn C. Rexroth.............. 21,277(2) 0.52% 141.0p March 10, 2006 L17,827 L46,158
35,461(3) 0.86% 141.0p March 10, 2006 L29,712 L76,928
47,542(3) 1.15% 138.0p March 10, 2006 L41,260 L104,562
Simeon Galpert............... 21,277(2) 0.52% 141.0p March 10, 2006 (5) L17,827(5) L46,158(5)
35,106(3) 0.85% 141.0p March 10, 2006 (5) L29,414(5) L76,158(5)
Roger P. Wilson.............. 21,277(2) 0.52% 141.0p March 10, 2006 L17,827 L46,158
117,730(3) 2.86% 141.0p March 10, 2006 L98,643 L255,399
Bruce Langham................ 21,277(2) 0.52% 141.0p March 10, 2006 L17,827 L46,158
30,851(3) 0.75% 141.0p March 10, 2006 L25,849 L66,927
</TABLE>

- ---------------

1. The exercise prices reflect the middle market quotation on the London Stock
Exchange for the Ordinary Shares on the day of grant in the case of
incentive stock options under Section 422 of the U.S. Internal Revenue Code,
as amended, and on the day before the grant in the case of other options.

2. Represents grants under the Telewest (1995) (No.1) Executive Share Option
Scheme.

3. Represents grants under the Telewest (1995) (No.2) Executive Share Option
Scheme.

4. Pursuant to arrangements with the Company in connection with his
resignation, Mr. Michels' options remain in effect in accordance with the
Rules of the Schemes following his resignation, which was effective as of
July 31, 1996.

5. Pursuant to the Rules of the Schemes, Mr. Galpert's options will lapse on
March 31, 1997 (the effective date of his resignation).

OPTION EXERCISES AND YEAR-END VALUE TABLE(1)

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES ACQUIRED VALUE OPTIONS AT YEAR-END AT YEAR-END
NAME ON EXERCISE REALIZED EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE(2)
- -------------------------- --------------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Stephen J. Davidson....... 0 0 0/285,959 0/0
Alan Michels.............. 0 0 348,001/0 0/0
Lynn C. Rexroth........... 0 0 0/212,162 0/0
Simon Galpert............. 0 0 0/173,001 0/0
Roger P. Wilson........... 0 0 0/139,007 0/0
Bruce D. Langham.......... 0 0 0/157,084 0/0
</TABLE>

- ---------------

1. References to grants of options are options granted by the Company under its
Executive Share Option Schemes and Sharesave Scheme.

2. Based on the closing price per Ordinary Share on December 31, 1996 of 124p.

Employment Agreements

Mr. Davidson and the Company have agreed that Mr. Davidson will serve as
Chief Executive Officer of the Company for an indefinite term, commencing as of
February 12, 1997. The Company and Mr. Davidson each has the right to terminate
the employment agreement at any time upon one years' notice. The agreement
provides that Mr. Davidson will receive a base salary of L335,000 per annum and
also provides that he will be eligible for a bonus of 25% of his base salary
each year upon the Company's achievement of target performance and certain
personal objectives, increasing to a maximum of 50% of his base salary if the
Company exceeds target performance by specified amounts.

16
<PAGE> 26

Pursuant to a secondment agreement between the Company and an affiliate of
U S WEST, Mr. Michels and the Company entered into an employment agreement which
provided that Mr. Michels would serve as Chief Executive Officer of the Company
for an initial term of three years commencing as of November 29, 1994. Effective
July 31, 1996, Mr. Michels resigned from his positions as Chief Executive
Officer and a member of the Board of Directors. In accordance with his
employment agreement (as most recently amended), prior to his resignation Mr.
Michels received gross payments in 1996 equivalent to L167,900 per annum, which
consisted of a base salary of L100,542 and foreign service premiums and other
expatriate compensation in an aggregate of L67,358 (subject to certain
adjustments). Mr. Michels was also eligible for, but did not receive, a
short-term bonus of 40% of his base salary each year upon the Company's
achievements of target performance, increasing to a maximum of 80% of his base
salary if the Company exceeded target performance by specified amounts. In
connection with such resignation, the Company and Mr. Michels agreed to a
termination payment of L539,329 in lieu of any additional salary, bonus and
other benefits under Mr. Michel's employment agreement from the date of
resignation through the end of the contract term. Mr. Michels retains his award
under the Restricted Share Scheme with respect to 434,787 Ordinary Shares and
his awards under the Executive Share Option Schemes with respect to 348,001
Ordinary Shares, in each case exercisable pursuant to the original terms thereof
and his arrangement with the Company in connection with his termination.

Mr. Rexroth commenced employment with the Company on December 24, 1992.
Pursuant to the terms of a new assignment agreement with U S WEST Overseas on
December 1, 1995, Mr. Rexroth was assigned to serve as Chief Operations Officer
for a fixed term of eighteen months, commencing as of January 1, 1996. U S WEST
Overseas and Mr. Rexroth each has the right to terminate the agreement upon 60
days' notice. The agreement (as most recently amended) provides that Mr. Rexroth
will receive a base salary of L175,000 per annum plus foreign service premiums
and other expatriate compensation (subject to certain adjustments) and also
provides that he will be eligible for a bonus of 30% of his base salary each
year upon the Company's achievement of target performance and certain personal
objectives. On termination, Mr. Rexroth is entitled to be reimbursed for
relocation costs to the U.S. The Company has agreed to reimburse U S WEST
Overseas for all amounts paid to Mr. Rexroth during the term of the assignment.
Mr. Rexroth continues to receive benefits under certain U S WEST plans.

Mr. Galpert and the Company entered into an employment agreement which
provides that Mr. Galpert will serve as Senior Vice President of Finance of the
Company for an indefinite term, commencing as of June 6, 1994. The Company and
Mr. Galpert each has the right to terminate the employment agreement at any time
upon one year's notice. The agreement (as most recently amended) provides that
Mr. Galpert will receive a base salary of L115,000 per annum and also provides
that he will be eligible for a bonus of 25% of his base salary each year upon
the Company's achievement of target performance, increasing to a maximum of 50%
of his base salary if the Company exceeds target performance by specified
amounts. Mr. Galpert resigned from his position as Senior Vice President of
Finance effective as of March 31, 1997. Mr. Galpert retains his award under the
Restricted Share Scheme with respect to 76,880 Ordinary Shares (the pro rata
vested portion (75%) of his current outstanding grant) and his awards under the
Executive Share Option Schemes lapsed.

Mr. Wilson commenced employment with the Company on October 3, 1995, being
previously employed by SBCC since October 1992. Mr. Wilson and the Company
entered into an employment agreement which provides that Mr. Wilson will serve
as Senior Vice President of Residential Services of the Company for an
indefinite term, commencing as of September 16, 1996. The Company and Mr. Wilson
each has the right to terminate the employment agreement at any time upon one
year's notice. The agreement provides that Mr. Wilson will receive a base salary
of L85,460 per annum and also provides that he will be eligible for a bonus of
25% of his base salary each year upon the Company's achievement of target
performance, increasing to a maximum of 50% of his base salary if the Company
exceeds target performance by specified amounts. Following reviews in January
1996, January 1997 and March 1997 Mr. Wilson's salary was increased to L98,000
per annum, L106,820 per annum and L120,000 per annum, respectively.

Mr. Langham commenced employment with the Company on October 28, 1991. Mr.
Langham and the Company entered into an employment agreement which provides that
Mr. Langham will serve as Senior Vice President of Digital Services of the
Company for an indefinite term, commencing as of September 16, 1996. The Company
and Mr. Langham each has the right to terminate the employment agreement at any
time upon

17
<PAGE> 27

one year's notice. The agreement provides that Mr. Langham will receive a base
salary of L98,000 per annum and also provides that he will be eligible for a
bonus of 25% of his base salary each year upon the Company's achievement of
target performance, increasing to a maximum of 50% of his base salary if the
Company exceeds target performance by specified amounts. Following a review in
January 1997, Mr. Langham's salary was increased to L102,900 per annum. In
addition, the Company has also agreed to make certain payments and provide
certain benefits to Mr. Langham in the event he resigns or is terminated under
certain circumstances prior to September 16, 1997.

REMUNERATION COMMITTEE REPORT

A report of the Remuneration Committee of the Company's Board of Directors,
covering various matters specified by applicable U.S. law and the U.K. Code of
Best Practice set forth in the recent Report of the Study Group on Directors'
Remuneration chaired by Sir Richard Greenbury, is set out in the Annual Report
of the Company for 1996 under the caption "Report of the Remuneration
Committee," and such report is incorporated by reference herein.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Secondment of Personnel

Affiliates of TCI, U S WEST, SBC and Cox have seconded senior personnel to
the Company to provide certain business and technical expertise and support.
Currently, five of the Company's employees are on secondment from affiliates of
TCI, U S WEST, SBC and Cox. The Company has agreed in secondment agreements to
reimburse the affiliates of TCI, U S WEST, SBC and Cox, as the case may be, for
the full costs each incurs in respect of any personnel seconded to the Company.
The aggregate amount expensed by the Company in connection with amounts paid to
TCI, U S WEST, SBC and Cox (or affiliates thereof) in respect of personnel (and
certain technical consultants) in 1996 was approximately L375,000, L1,810,000,
L93,000 and L281,000, respectively.

Technology Sharing Arrangements

TCI and U S WEST have agreed to make available to the Company proprietary
technology and know-how which they are permitted to license and which is related
to cable television and cable telephony at a fair market price which is
generally no less favorable than those provided to any unaffiliated customers.
The Company has agreed to make available to TCI and U S WEST any of the
Company's proprietary technology and know-how which it is permitted to license
and which is related to cable television and cable telephony at a fair market
price which is generally not less favorable than those provided to any
unaffiliated customers.

Programming

An affiliate of TCI and an affiliate of U S WEST own approximately 50.9%
and 7.4%, respectively, of Flextech plc ("Flextech"). In addition, Mr. Vierra
and Mr. Singer are directors of Flextech. Flextech owns interests (in some
cases, controlling interests) in certain programming channels and provides
management services to certain of such channels and other channels. Some of the
channels in which Flextech owns an interest or provides management services to
are offered directly by the Company to its subscribers and some are included in
the BSkyB Multi-Channel Package, which is also offered by the Company to its
subscribers. In addition, affiliates of U S WEST, TCI and SBC are partners in
CPP-1, a joint venture with three other U.S. cable operators which has a 10%
interest in Live TV. Lord Borrie is also a director of The Mirror Group plc,
which has an interest in Live TV. Live TV is carried by the Company's network.
Furthermore, Cox has an interest in The Discovery Channel, The Learning Channel,
UK Gold and UK Living and an affiliate of TCI has an interest in Time Warner
Inc., which owns CNN International, The Cartoon Network and TNT, all of which
are carried by the Company's network. Cox has announced its intention to
exchange its interests in UK Gold and UK Living for an interest in Flextech. The
Company believes that programming obtained from all the affiliated programming
suppliers is obtained on terms no less favorable than those available to
unrelated third parties.

CERTAIN TAX CONSEQUENCES OF OWNERSHIP OF ADSS

A description of certain tax consequences relating to the ownership of ADSs
is set out in Annex A hereto.

18
<PAGE> 28

PERFORMANCE GRAPHS

The following graph compares, for the period from November 22, 1994 through
the fiscal year ended December 31, 1996, the cumulative total shareholder return
on the ADSs which are traded on the NASDAQ National Market to that of (a) the
S&P 500 Index, and (b) a peer group which consists of Bell Cablemedia Plc,
Comcast UK Cable Partnership and International CableTel Inc. (the "First NASDAQ
Peer Group") through June 8, 1995, and from June 9, 1995 through December 31,
1996, the First NASDAQ Peer Group plus NYNEX CableComms Group plc and General
Cable plc (the "Second NASDAQ Peer Group"), with the assumed reinvestment on
June 9, 1995 of the cumulative shareholder return on the First NASDAQ Peer Group
into the Second NASDAQ Peer Group. The cumulative shareholder return on the ADSs
reflects ADSs evidencing Old Telewest Ordinary Shares (which were traded on the
London Stock Exchange prior to the Merger) for the period from November 22, 1994
(the first time such shares were registered under the U.S. Securities Exchange
Act of 1934, as amended (the "Exchange Act")) through September 29, 1995 (the
last day of trading for such shares) and reflects the Company's Ordinary Shares
for the period October 2, 1995 (the first day of trading for such shares)
through December 31, 1996. The First NASDAQ Peer Group was originally selected
because it represented companies listed on the NASDAQ National Market that are
engaged (like the Company) principally in the cable television and cable
telephony business in the U.K. The two additional companies in the Second NASDAQ
Peer Group, both of which engage principally in the cable television and cable
telephony business in the U.K., became listed subsequent to the selection of the
First NASDAQ Peer Group (the second of the two companies becoming listed June 9,
1995). The Company believes that the addition of the two companies to the Second
NASDAQ Peer Group is appropriate because those companies are in the same
business as the Company.

<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500 SECOND NASDAQ FIRST NASDAQ
(FISCAL YEAR COVERED) TELEWEST ADSS |COMPOSITE |PEER GROUP |PEER GROUP
<S> <C> <C> <C> <C>
'NOV. 22, 1994' 100 100 100
'DEC. 31, 1994' 93.38 102.77 92.64
'MAR. 31, 1995' 92.67 108.37 90.26
'JUN. 9, 1995' 91.79 116.99 95.89 95.89
'JUN. 30, 1995' 89.25 121.51 93.51
'SEPT. 30, 1995' 106.23 131.84 103.77
'DEC. 31, 1995' 85.67 142.48 89.73
'MAR. 31, 1996' 77.62 152.73 84.19
'JUN. 30, 1996' 88.48 156.76 88.4
'SEPT. 30, 1996' 65.66 160.58 80.56
'DEC. 31, 1996' 66.87 158.93 87.54
</TABLE>

<PAGE> 29

The following graph compares, for the period from November 23, 1994 through
the fiscal year ended December 31, 1996, the cumulative total shareholder return
on Ordinary Shares which are traded on the London Stock Exchange to that of (a)
the Financial Times -- Stock Exchange All Share Index, and (b) a peer group
which consists of British Telecommunications plc, Cable & Wireless plc,
Vodaphone and Securicor Services (the "First LSE Peer Group") through June 8,
1995, and from June 9, 1995 through December 31, 1996, NYNEX CableComms Group
plc and General Cable plc (the "Second LSE Peer Group"), with the assumed
reinvestment on June 9, 1995 of the cumulative shareholder return on the First
LSE Peer Group into the Second LSE Peer Group (June 9, 1995). The cumulative
shareholder return on Ordinary Shares reflects the Old Telewest Ordinary Shares
(which were traded on the London Stock Exchange prior to the Merger) for the
period from November 22, 1994 (the first time such shares were registered under
the Exchange Act) through September 29, 1995 (the last day of trading for such
shares) and reflects the Company's Ordinary Shares for the period from October
2, 1995 (the first day of trading for such shares) through December 31, 1996. At
the time the First Peer Group was selected there were no companies listed on the
London Stock Exchange that engaged (like the Company) principally in the cable
television and cable telephony business in the U.K., and accordingly the First
LSE Peer Group represents selected companies listed on the London Stock Exchange
engaged in the same general industry as the Company (i.e. communications). The
two companies in the Second LSE Peer Group have subsequently become listed on
the London Stock Exchange and both are engaged principally in the cable
television and telephony business in the U.K., and are represented in the
performance graph as of the date of the inclusion of the Second NASDAQ Peer
Group (June 9, 1995). The Company believes that because the companies in the
Second LSE Peer Group are in the same business as the Company, they represent a
more appropriate peer group than the companies in the First LSE Peer Group.

<TABLE>
<CAPTION>
TELEWEST
MEASUREMENT PERIOD SECOND LSE FSTE ALL FIRST LSE |ORDINARY
(FISCAL YEAR COVERED) |PEER GROUP |SHARE |PEER GROUP SHARES
<S> <C> <C> <C> <C>
'NOV. 22, 1994' 100 100 100
'DEC. 31, 1994' 98.6 100.9 94
'MAR. 31, 1995' 101 99 94
'JUN. 9, 1995' 105.7 108.5 105.7 90.9
'JUN. 30, 1995' 102.9 107.6 89.8
'SEPT. 30, 1995' 115.6 116.3 107.1
'DEC. 31, 1995' 98.1 122.1 85.2
'MAR. 31, 1996' 92.9 126.4 78
'JUN. 30, 1996' 95.8 128.7 88.7
'SEPT. 30, 1996' 87.3 136.6 65.4
'DEC. 31, 1996' 97.2 142.4 68.1
</TABLE>

In calculating cumulative total shareholder return in the two preceding
graphs, returns are calculated on a quarterly basis (assuming an initial
investment of $100 on November 22, 1994), reinvestment of dividends is assumed,
and the returns of each member of the indices and the peer groups are weighed
for market capitalization.

20
<PAGE> 30

COMPLIANCE WITH SECTION 16(A) OF THE U.S. SECURITIES EXCHANGE
ACT OF 1934

Section 16(a) of the U.S. Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and any persons who own more than
ten percent of the Company's Ordinary Shares to file reports of initial
ownership of the Company's Ordinary Shares and subsequent changes in that
ownership with the Securities and Exchange Commission (initial reports are filed
on Form 3 and reports as to subsequent changes or certain other matters are
filed on Forms 4 or 5). Officers, directors and greater than ten-percent
beneficial owners are also required to furnish the Company with copies of all
Section 16(a) forms they file.

Based solely upon a review of the copies of the forms furnished to the
Company, the Company believes that during 1996 all Section 16(a) filing
requirements were complied with except that (a) Mr. Vierra filed one Report on
Form 5 late covering three transactions which had not previously been reported
in a timely manner and (b) Messrs. Stephen Davidson, Alan Michels, Lynn Rexroth,
Simeon Galpert, Bruce Langham, Roger Wilson and Ms. Victoria Hull each filed one
Report on Form 5 late covering an aggregate of 16 transactions, all relating to
the grant of options on March 11, 1996 pursuant to the Telewest (1995) (No.1)
Executive Share Option Scheme and the Telewest (1995) (No.2) Executive Share
Option Scheme.

APPLICABILITY OF SECTION 162(M) OF THE U.S. INTERNAL REVENUE CODE OF 1986

Because the Company is not currently and does not expect in the future to
be subject to U.S. federal income tax, Section 162(m) of the U.S. Internal
Revenue Code of 1986, as amended (the "Code"), which generally denies a
deduction for U.S. federal income tax purposes to publicly-held companies for
compensation paid to certain executives in excess of $1 million per executive
per taxable year, currently does not apply to the Company.

VOTING REQUIREMENTS

Every holder of Ordinary Shares who is present in person or by proxy at the
Annual General Meeting shall have one vote on each matter to be presented, and
on a poll every shareholder who is present in person or by proxy shall have one
vote for every Ordinary Share held (subject in each case to disenfranchisement
in the limited circumstances provided in the Articles). Voting at the Annual
General Meeting will be by a show of hands unless a poll is demanded. A poll may
be demanded by (a) the chairman of the meeting, (b) not less than five
shareholders present in person or by proxy and entitled to vote, (c) any
shareholder or shareholders present in person or by proxy and representing in
the aggregate not less than one-tenth of the total voting rights of all
shareholders entitled to attend and vote at such meeting or (d) any shareholder
or shareholders present in person or by proxy and holding shares conferring a
right to vote at the meeting on which there have been paid-up sums in aggregate
equal to not less than one-tenth of the total sum paid on all shares conferring
such right. Since under English law voting rights are only conferred on
registered holders of shares, a person holding through a nominee may not
directly demand a poll.

Where a poll is not demanded, the interests of beneficial owners of
Ordinary Shares who hold through a nominee or record owners who have appointed a
proxy may not be reflected in votes cast on a show of hands if such nominee or
proxy does not attend the meeting or receives conflicting voting instructions
from different beneficial or records owners for whom it holds as nominee or acts
as proxy. In any event, in a show of hands, such nominee or proxy will have only
one vote, notwithstanding the number of beneficial or record owners for whom he
or she acts.

Resolutions #1 through #13 and #15 through #17 are Ordinary Resolutions and
require the affirmative vote of a majority of the shareholders present in person
or by proxy, in the case of a vote by show of hands, or present in person or by
proxy and holding shares conferring in the aggregate a majority of the votes
actually cast on the Ordinary Resolution, in the case of a vote by poll.
Resolutions #14 and #18 are Special Resolutions and require the affirmative vote
of not less than 75% of the shareholders present in person or by proxy, in the
case of a vote by show of hands, or present in person or by proxy and holding
shares conferring in the aggregate at least 75% of the votes actually cast on
the Special Resolution, in the case of a vote by poll. In

21
<PAGE> 31

accordance with London Stock Exchange Rules, shareholders do not have an
opportunity to cast "abstentions." Broker non-votes will not count as votes cast
"FOR" or "AGAINST" any matter.

SOLICITATION OF PROXIES

The cost of soliciting proxies in the accompanying form will be borne by
the Company. The Company has not retained any independent soliciting agent.
Proxies may be solicited in person or by telephone or telegram by the directors,
executive officers and employees of the Company, who will not receive additional
compensation for such activities.

Brokers, nominees and other similar record holders will be requested to
forward proxy solicitation material to beneficial owners and, upon request, will
be reimbursed by the Company for their customary out-of-pocket expenses.

SUBMISSION OF SHAREHOLDER PROPOSALS

Shareholder proposals intended for inclusion in next year's Proxy Statement
should be sent to the Company Secretary at Genesis Business Park, Albert Drive,
Woking, Surrey GU21 5RW, United Kingdom, and must be received by November 27,
1997.

FINANCIAL STATEMENTS AVAILABLE

Consolidated financial statements for the Company are included in the
Annual Report of the Company for 1996 furnished to shareholders with this Proxy
Statement. Additional copies of these statements and the Annual Report on Form
10-K for the year ended December 31, 1996 may be obtained without charge from
the Company Secretary at Genesis Business Park, Albert Drive, Woking, Surrey
GU21 5RW, United Kingdom.

The annual report on Form 10-K is also on file with the Securities and
Exchange Commission, Washington, D.C. 20549, and the Nasdaq Stock Market Inc.,
1735 K Street, NW, Washington, DC 20006-1500.

DATED: MARCH 26, 1997

22
<PAGE> 32

ANNEX A

CERTAIN TAX CONSEQUENCES OF OWNERSHIP OF

TELEWEST ORDINARY SHARES AND ADSS

GENERAL

The following generally summarizes the principal U.K. and U.S. federal
income tax consequences of the purchase, ownership and disposition of Ordinary
Shares or ADSs (evidenced by ADRs) to beneficial owners that are residents or
citizens of the U.S. and hold the Ordinary Shares or ADSs as capital assets
("U.S. Holders"). BECAUSE THIS IS A GENERAL SUMMARY, PROSPECTIVE PURCHASERS OF
ORDINARY SHARES OR ADSS WHO ARE U.S. HOLDERS ARE ADVISED TO CONSULT THEIR OWN
TAX ADVISORS WITH RESPECT TO THE U.S. FEDERAL, STATE AND LOCAL TAX CONSEQUENCES,
AS WELL AS TO THE U.K. TAX CONSEQUENCES, OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF ORDINARY SHARES OR ADSS APPLICABLE IN THEIR PARTICULAR TAX
SITUATIONS.

The statements of U.S. federal income tax and U.K. tax law set out below
are based (a) on the laws in force, and as interpreted by the relevant taxation
authorities, as of the date of this Proxy Statement, and are subject to any
changes (which may apply retroactively) in U.S. or U.K. law, or in the
interpretation thereof by the relevant taxation authorities, or in the
conventions between the U.S. and the U.K. relating to income and capital gains
(the "Income Tax Convention") and estate and gift taxes (the "Estate and Gift
Tax Convention"), occurring after such date and (b) in part, on representations
of the Depositary and on the assumption that each obligation in the Deposit
Agreement and any related agreement will be performed in accordance with its
terms.

This summary does not address the laws of any state or locality or any
foreign government (other than the U.K.). Further, this summary does not address
the tax consequences to particular classes of taxpayers that are subject to
special rules including, without limitation, dealers in securities or
currencies, insurance companies, tax exempt organizations, financial
institutions, persons that hold their Ordinary Shares or ADSs as part of a
straddle, hedging or "conversion transaction", persons whose functional currency
is other than the U.S. dollar, tax-exempt investors or persons owning directly,
indirectly or constructively, 10% or more of the Company's stock. This summary
does not address the U.K. or U.S. tax treatment of persons who hold Ordinary
Shares or ADSs through a partnership or other pass-through entity. Except to the
limited extent discussed below, it does not consider the U.K. tax or U.S. tax
consequences to a person other than a U.S. Holder (a "Non-U.S. Holder").

For purposes of the Conventions and the Code, U.S. Holders will be treated
as the owners of the Ordinary Shares represented by ADSs evidenced by ADRs.
Accordingly, and except as noted below, the U.K. tax and U.S. federal income tax
consequences discussed below apply equally to beneficial owners of both Ordinary
Shares and ADSs that are U.S. Holders.

TAXATION OF DIVIDENDS

For the purposes of this summary, the term "Eligible U.S. Holder" means a
beneficial owner of an ADS or an Ordinary Share (a) that derives and
beneficially owns the cash dividend paid thereon, (b) that is an individual, a
corporation, a trust or estate resident in the U.S. (and, in the case of a
corporation, not also resident in the U.K. for U.K. tax purposes) for the
purposes of the Income Tax Convention and (c) whose holding is not effectively
connected with a "permanent establishment" through which the Eligible U.S.
Holder carries on business in the U.K. with a "fixed base" in the U.K. from
which the Eligible U.S. Holder performs independent personal services. Such term
excludes, however, (a) a beneficial owner who owns at least 10% of the Ordinary
Shares in respect of which the dividend is paid, (b) under certain
circumstances, a corporation 25% or more of the capital of which is owned
directly or indirectly by one or more persons who are not individual residents
or nationals of the U.S. and (c) a U.S. corporation that controls, directly or
indirectly (either alone or with one or more associated corporations), 10% or
more of the voting stock of the Company.

The Company is required, when paying a dividend in respect of the Ordinary
Shares, to account to the U.K. Inland Revenue for a payment known as advance
corporation tax ("ACT"). The rate of ACT at present

A-1
<PAGE> 33

is equal to 25% of any dividend paid to shareholders, which is equivalent to 20%
of the sum of the dividend and the related ACT.

An Eligible U.S. Holder is entitled under the Income Tax Convention and
current U.K. law to claim from the U.K. Inland Revenue a refund of an amount
equal to the ACT paid by the Company in respect of the dividend (the "Tax Credit
Amount"), but subject to a 15% U.K. withholding tax on the combined sum of the
dividend paid and the related Tax Credit Amount. For example, assuming
continuance of ACT at the rate of 25% of a dividend paid, a dividend of L8.00
paid to such an Eligible U.S. Holder would generally entitle the Eligible U.S.
Holder to claim L0.50 (a Tax Credit Amount of L2.00 less a withholding of L1.50)
from the U.K. Inland Revenue, giving a total cash received, after U.K. taxes but
before U.S. taxes, of L8.50.

If the Eligible U.S. Holder is a U.S. trust or estate, the Tax Credit
Amount will be available only to the extent that the income derived by such
trust or estate is subject to U.S. tax as the income of a resident either in its
hands or in the hands of its beneficiaries, as the case may be.

For U.S. federal income tax purposes, the gross amount of a dividend plus
the Tax Credit Amount, including the 15% U.K. withholding tax thereon, (a) will
be included in gross income by a U.S. Holder and (b) will be treated as foreign
source dividend income to the extent paid out of current or accumulated earnings
and profits as determined for U.S. federal income tax purposes. Subject to
certain limitations, the 15% U.K. withholding tax will be treated as a foreign
income tax eligible for credit against such Eligible U.S. Holder's federal
income tax (or, alternatively, a deduction in computing such U.S. Holder's
taxable income). The consequences of these limitations will depend on the nature
and sources of each Eligible U.S. Holder's income and the deductions
appropriately allocated or apportioned thereto. In general, no dividends
received deduction will be allowed with respect to dividends paid by the
Company. The amount of the dividend will be the U.S. dollar spot value of the
dividend on the date of receipt, regardless of whether the payment is in fact
converted into U.S. dollars on such date. Exchange gain or loss, if any,
recognized by an Eligible U.S. Holder on a sale or other disposition of pounds
received pursuant to the dividend will generally be U.S. source ordinary income
or loss.

Arrangements exist with the U.K. Inland Revenue under which certain
Eligible U.S. Holders of ADSs (i.e., (a) a U.S. corporation, (b) an individual
resident in the U.S. and not resident in the U.K. or (c) a trust or estate all
the beneficiaries of which are resident in the U.S. or Canada) generally will
receive directly from the Company together with the payment of the associated
dividend payment of the Tax Credit Amount to which such Holder is entitled, net
of the applicable U.K. withholding tax, without the need to file a claim for
refund. To claim the benefit of the arrangements, the registered holder must
complete the declaration on the reverse of the dividend check confirming the
Eligible U.S. Holder's entitlement to the Tax Credit Amount and present the
check for payment within three months from the date of issue of the check. These
arrangements can be terminated or altered without notice by the U.K. Inland
Revenue.

In addition, arrangements exist with the U.K. Inland Revenue under which an
Eligible U.S. Holder of Ordinary Shares will receive payment of the U.K. tax
credit at the same time as and together with the payment of the associated
dividend. In order to receive such payment, the Eligible U.S. Holder must have
the Ordinary Shares registered in the name of a nominee approved by the U.K.
Inland Revenue for such purpose, and the nominee must follow certain procedural
requirements. In addition, the qualifying holder must be either: (a) an
individual who: (i) is not resident in the U.K. and does not retain the use of
any accommodation in the U.K., (ii) has not during the previous four years been
in the U.K. for as much as three months a year on average, or for a period or
periods amounting in the aggregate to six months in the relevant U.K. income tax
year; (iii) has not been absent from the U.S. for a complete U.S. tax year in
any of the previous four years; (iv) does not have a permanent establishment in
the U.K. and (v) does not own 10% or more of the class of shares in respect of
which the dividend is paid; or (b) a corporation: (i) which is managed and
controlled in the U.S. and does not have a permanent establishment in the U.K.;
(ii) which does not, either alone or together with one or more associated
corporations, control, directly or indirectly, 10% or more of the voting power
in the Company; (iii) which does not own 10% or more of the class of shares in
respect of which the dividend is paid; (iv) which is liable for U.S. tax on the
dividend and (v) at least 75% of the capital of which is owned directly or
indirectly by persons who are U.S. residents. These arrangements will be
extended to trusts,

A-2
<PAGE> 34

estates in the course of administration, pension funds, foundations and similar
bodies only with the prior approval of the U.K. Inland Revenue.

Certain Eligible U.S. Holders who are not entitled to receive payment of
the U.K. Tax Credit Amount from the Company with payment of the associated
dividend but who, nevertheless, are entitled to a refund of the Tax Credit
Amount, net of the U.K. withholding tax, must file a claim for the Tax Credit
Amount in the manner described in U.S. Revenue Procedure 80-18, 1980-1 C.B. 623,
as modified by U.S. Revenue Procedures 81-58, 1981-2 C.B. 678; 84-60, 1984-2
C.B. 504, and 90-61, 1990-2 C.B. 657. Claims for tax refund must be made within
six years of the U.K. year of assessment (generally the 12-month period ending
April 5 in each year) in which the related dividend was paid. The first claim by
a claimant for a tax credit under these procedures is made by sending the
appropriate U.K. form (FD/13) in duplicate to the Director of the Internal
Revenue Service Center with which the holder's last U.S. federal income tax
return was filed. Forms may be available from the U.S. Internal Revenue Service
Assistant Commissioner (International), 950 L'Enfant Plaza South, S.W.,
Washington, D.C. 20024, Attention: Taxpayers Service Division. Because a refund
claim is not considered made until the U.K. tax authorities receive the
appropriate form from the U.S. Internal Revenue Service, forms should be sent to
the U.S. Internal Revenue Service well before the end of the applicable
limitation period. Any claim by a claimant after the first claim by such a U.S.
Holder for payment under these procedures should be filed directly with the U.K.
Financial Intermediaries and Claims Office, Fitz Roy House, P.O. Box 46,
Nottingham, England, NG2 1BD.

Under Section 812 of ICTA 1988, the U.K. government has the power to deny
the payment of associated U.K. tax credits under the Income Tax Convention to a
corporation that controls, directly or indirectly, either alone or together with
one or more corporations, which are treated as associated for the purposes of
the Income Tax Convention, at least 10% of the voting power of the Company, if
it or an "associated company" (as defined in Section 416 ICTA 1988) has a
"qualifying presence" (as defined in Section 812 ICTA 1988) in a state in the
U.S. which operates a unitary system of corporation taxation. These provisions
will come into force only if the U.K. government so determines by statutory
instrument. No such instrument has yet been made.

Subject to the discussion below regarding backup withholding tax, a
Non-U.S. Holder of Ordinary Shares or ADSs generally will not be subject to U.S.
federal income or withholding tax on dividends received on Ordinary Shares or
ADSs, unless such income is effectively connected with the conduct of a trade or
business in the U.S. and, in general, in the case of a Non-U.S. Holder entitled
to benefits under a tax treaty, attributable to a permanent establishment or
fixed base in the U.S.

TAXATION OF CAPITAL GAINS

A U.S. Holder who is not resident or ordinarily resident in the U.K. for
U.K. tax purposes will not be liable for U.K. tax on capital gains realized or
accrued on the sale or other disposal of Ordinary Shares or ADSs unless the
Ordinary Shares or ADSs are held in connection with a trade, profession or
vocation carried on by such U.S. Holder in the U.K. through a branch or agency
which constitutes a permanent establishment or fixed base and the Ordinary
Shares or ADSs are or have been used, held or acquired for the purposes of such
trade, profession or vocation of such branch or agency. A U.S. Holder will be
liable for U.S. federal income tax on such gains to the same extent as on any
other gains from sales or disposition of stock.

Assuming that gain on the disposition of Ordinary Shares or ADSs would not
be subject to U.K. tax, such gain would be U.S. source income for U.S. foreign
tax credit limitation purposes. Deposits and withdrawals of Ordinary Shares by
U.S. Holders in exchange for ADSs will not result in the realization of gain or
loss for U.K. capital gains tax or U.S. federal income tax purposes. Subject to
the discussion below of backup withholding, a Non-U.S. Holder of Ordinary Shares
or ADSs will not be subject to U.S. federal income or withholding tax on gain
realized on the sale of Ordinary Shares or ADSs unless (i) such gain is
effectively connected with the conduct by the Non-U.S. Holder of a trade or
business in the U.S. and, in general, in the case of a Non-U.S. Holder entitled
to benefits under a tax treaty, such gain is attributable to a permanent
establishment or fixed base in the U.S. or (ii) in the case of gain realized by
an individual Non-U.S. Holder,

A-3
<PAGE> 35

the Non-U.S. Holder is present in the U.S. for 183 days or more in the taxable
year of the sale and certain other conditions are met.

U.S. INFORMATION REPORTING AND BACKUP WITHHOLDING

U.S. Holders are generally subject to information reporting requirements
with respect to dividends paid in the U.S. on Ordinary Shares or ADSs. Under
existing regulations, such dividends are not subject to back up withholding.
However, under proposed regulations such dividends paid in the United States
would be subject to back up withholding. Non-U.S. Holders will not be subject to
information reporting or back up withholding with respect to dividends on
Ordinary Shares or ADSs, unless payment is made through a paying agent (or
office) in the U.S. Non-U.S. Holders generally will be subject to information
reporting (and, under proposed regulations, could be subject to back up
withholding at a rate of 31%) with respect to the payment within the U.S. of
dividends on Ordinary Shares or ADSs, unless the holder provides a taxpayer
identification number, certifies to its foreign status, or otherwise establishes
an exemption.

U.S. Holders generally will be subject to information and back up
withholding at 31% on proceeds paid from the disposition of Ordinary Shares or
ADSs unless the U.S. Holder provides an IRS Form W-9 or otherwise establishes an
exemption. Non-U.S. Holders generally will be subject to information reporting
and back up withholding at a rate of 31% on the payment to or through the U.S.
office of a broker, whether domestic or foreign, of proceeds from the
disposition of Ordinary Shares or ADSs, unless the holder provides a taxpayer
identification number, certifies to its foreign status or otherwise establishes
an exemption. Non-U.S. Holders will not be subject to information reporting or
back up withholding with respect to the payment by a foreign office of a broker
of proceeds from the disposition of Ordinary Shares or ADSs provided, however,
that, if the broker is a U.S. person or "U.S. related person," information
reporting (but not back up withholding) will apply, unless the broker has
documentary evidence in its records of the Non-U.S. Holder's foreign status, the
Non-U.S. Holder certifies to its foreign status under penalties of perjury or
otherwise establishes an exemption. For this purpose, a "U.S. related person" is
a broker or other intermediary that is a controlled foreign corporation for U.S.
federal income tax purposes or that is a person 50% or more of the gross income
from all sources of which, over a specified three year period, is effectively
connected with the conduct of a U.S. trade or business.

The amount of any back up withholding will be allowed as a credit against
such holder's U.S. federal income tax liability and may entitle such holder to a
refund, provided that the required information is furnished to the U.S. Internal
Revenue Service.

PASSIVE FOREIGN INVESTMENT COMPANY CONSIDERATIONS

The Company generally will be a passive foreign investment company ("PFIC")
for U.S. federal income tax purposes for any taxable year (i.e., the period from
January 1 to December 31) in which either (a) 75% or more of its gross income is
passive income or (b) on average for the taxable year, 50% or more of its assets
(measured by U.S. tax basis) produce or are held for the production of passive
income. The Internal Revenue Service has indicated that cash balances, even if
held as working capital, are considered to be passive assets that produce
passive income. As of the date of this Proxy Statement, the Company does not
believe it is a PFIC for U.S. federal income tax purposes, and, based on current
projections, the Company does not anticipate that it will become a PFIC. No
assurance can be given, however, that the Company will not become a PFIC in the
future.

The Company will monitor its status and, promptly following the end of any
taxable year, will notify shareholders if it believes that it is properly
classified as a PFIC for that taxable year, in which case it will comply with
the reporting requirements necessary for U.S. Holders to elect to treat the
Company as a "qualified electing fund" (a "QEF election"). If the Company were a
PFIC, U.S. Holders of Ordinary Shares or ADSs may suffer unfavourable U.S.
federal income tax consequences. This summary does not address the consequences
were the Company determined to be a PFIC. U.S. Holders should consult their own
tax advisers

A-4
<PAGE> 36

concerning the U.S. tax consequences of holding Ordinary Shares or ADSs if the
Company were considered to be a PFIC, including the consequences of making a QEF
election.

U.K. ESTATE AND INHERITANCE TAX

An Ordinary Share or ADS beneficially owned by an individual U.S. Holder
who is domiciled in the U.S. for the purposes of the Estate and Gift Tax
Convention and is not domiciled in the U.K. for such purposes is not subject to
U.K. inheritance tax on the individual's death or U.K. gift tax on a gift made
by the individual during his lifetime except where the Ordinary Share or ADS is
part of the business property of a U.K. "permanent establishment" of the
individual or pertains to a U.K. "fixed base" of an individual used for the
performance of independent personal services. The Estate and Gift Tax Convention
generally provides for tax paid in the U.K. to be credited against any tax
payable in the U.S. and for tax paid in the U.S. to be credited against any tax
payable in the U.K., based on priority rules set forth in that Convention, in a
case where an Ordinary Share or ADS is subject both to U.K. inheritance tax and
to U.S. federal gift or estate tax. There are special individual rules applying
to trusts. Ordinary Shares or ADSs held in a trust created by a U.S. Holder who
is not domiciled in the U.K. normally will fall outside the scope of U.K.
inheritance tax.

STAMP DUTY AND STAMP DUTY RESERVE TAX

Stamp duty reserve tax at the then-applicable rate arises upon the deposit
with the Depositary of the Ordinary Shares. The current rate of stamp duty
reserve tax is L1.50 per L100 (or part thereof). The stamp duty reserve tax on
the initial deposit of the Ordinary Shares represented by the ADSs was paid by
the Company. On the transfer of further Ordinary Shares to the Depositary, stamp
duty reserve tax will be payable by the Depositary and under the Deposit
Agreement, holders of ADRs must pay an amount equal to such tax to the
Depositary.

Provided that the instrument of transfer is not executed in the U.K. and
remains at all subsequent times outside the U.K., no U.K. stamp duty will be
payable on the acquisition or transfer of ADSs evidenced by ADRs, nor will an
agreement to transfer ADSs evidenced by ADRs give rise to a liability to stamp
duty reserve tax.

A transfer of Ordinary Shares by the Depositary or its nominee to the
beneficial owner of the relevant ADS or its nominee when the beneficial owner is
not transferring beneficial ownership will give rise to U.K. stamp duty at the
rate of 50p per transfer.

Purchasing Ordinary Shares, as opposed to ADSs, will normally give rise to
a charge to U.K. stamp duty or stamp duty reserve tax at the rate of 50p per
L100 (or part) of the price payable for the Ordinary Shares. Stamp duty and
stamp duty reserve tax generally are the liabilities of the purchaser. Where
such Ordinary Shares are later transferred to the Depositary's nominee, further
stamp duty or stamp duty reserve tax will normally be payable at the rate of
L1.50 per L100 (or part thereof) of the value of the Ordinary Shares at the time
of transfer. However, where Ordinary Shares being acquired are transferred
directly to the Depositary's nominee, the only charge will generally be the
higher charge of L1.50 per L100 (or part) of the price payable for the Ordinary
Shares so acquired.

The U.K. government has announced its intention to abolish both stamp duty
and stamp duty reserve tax in respect of the transfer of securities from a date
which has not yet been announced.

A-5
<PAGE> 37

ATTACHED IS A COPY OF THE "REPORT OF THE REMUNERATION COMMITTEE" WHICH WILL BE
SET OUT IN FULL IN THE COMPANY'S 1996 ANNUAL REPORT TO SHAREHOLDERS ON PAGE 40
AND INCORPORATED BY REFERENCE IN THE COMPANY'S 1997 PROXY STATEMENT. A COPY OF
THE COMPANY'S 1996 ANNUAL REPORT WILL BE SENT TO EACH SHAREHOLDER TOGETHER WITH
THE 1997 PROXY STATEMENT. THIS ARRANGEMENT WAS CLEARED WITH MR. ROGER SCHWALL OF
THE STAFF DURING THE PREPARATION OF THE COMPANY'S 1996 PROXY STATEMENT.

<PAGE> 38

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40 TELEWEST COMMUNICATIONS PLC
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Report of the Remuneration Committee

1. Compliance

The Report of the Study Group on Directors' Remuneration chaired by Sir Richard
Greenbury was published on 17 July 1995. A principal component of its
recommendations was a Code of Best Practice (the "Code"). The following report
by the Remuneration Committee complies with this Code and with Section A of the
Best Practice Provisions on remuneration committees as annexed to the Listing
Rules of the London Stock Exchange. Full consideration has also been given to
Section B of the Best Practice Provisions regarding remuneration policy, service
contracts and compensation, as annexed to the Listing Rules of the London Stock
Exchange. The Report is also in line with requirements under US securities laws
applicable to remuneration committee reports. Further information on senior
executive remuneration as required by US law can be found in the proxy statement
accompanying this document.

2. Composition

The members of the Committee are given on page 37 in the Report of the
Directors. The Committee submits reports regularly to the full board of
Directors concerning its activities and decisions. It has written terms of
reference which include the assessment and approval of the remuneration of the
executive Directors and senior executives. The Board determines the remuneration
of the non-executive Directors.

3. Remuneration policy for the executive Directors and senior executives

a) General policy

The Group aims to attract, motivate and retain high calibre executives by
rewarding them with competitive salary and benefit packages which are linked to
both individual and business performance. These packages are based on the
Group's philosophy of emphasising pay-for-performance. The Group recognises the
pressures for short-term as well as long-term performance and seeks to provide
an appropriate balance. The Group uses a market-based four-tiered salary
structure for its executive employees. Each executive is assigned to one of
these four tiers based on his or her level of responsibility and position in
relation to others inside and outside the Group.

The Committee believes that the Group's current remuneration policy (including
the proposed new share plans described below) appropriately aligns the Group's
executive compensation with the performance of the Group and shareholder
interests and offers competitive compensation for its executives. The Committee
does not believe in compensating for poor performance and does not reward
unsatisfactory performance. In the case of early termination of employment, it
is the Committee's policy to seek to mitigate any liability.

b) Remuneration components

There are four components to the executive remuneration package: base salary and
benefits, annual cash bonus, long-term incentive arrangements and pension.

i) Base salary and benefits

Salaries are established by the Committee by reference to those prevailing in
the employment market generally for executives of comparable status,
responsibility and skills. To assist in determining the comparability of
positions and competitive market pricing, the Group uses executive compensation
salary surveys prepared by recognised independent compensation consulting firms
in the UK. The Group uses surveys that specifically cover the UK cable
communications industry, as well as surveys of comparable companies of similar
size in similar industries. In general, and because of the competitive nature of
the market, the Group seeks to set overall executive compensation levels to rank
between the mid-market and upper quartile of the survey data.

Salary reviews are generally determined by the Committee on an annual basis.
Adjustments in base salary, if any, occur after a formal appraisal process,
taking account of individual performance, changes in job responsibilities,
changes in the marketplace and general economic conditions in the UK.

Benefits for senior executives typically include a car (or a cash payment in
lieu thereof) and payment of its operating expenses and fuel, and life,
disability and health insurance. The benefits are not pensionable.

ii) Annual cash bonuses

The Group's Short-Term Incentive Plan (the "STIP") provides each executive with
an opportunity to earn an annual cash award (which is not pensionable) based
upon the achievement of short-term Group targets (ie, one financial year) and
individual contributions to Group results. These targets are set by the
Remuneration Committee at the commencement of each financial year. Under the
STIP, the executive has an award opportunity expressed as a percentage of base
salary. For executive Directors, the award is up to 25% of salary for achieving
target, rising to a maximum of 50% of salary if the Group exceeds its STIP
target. The 1996 STIP awards to the executive Directors and senior executives
represented approximately 49.5% of the targeted bonus amount. The amount of the
STIP is based upon the extent to which the Group achieves certain specified
objectives and, in the case of the executive Directors, the extent to which the
executive Directors meet certain specified personal objectives. In 1996, the
STIP objectives related to the achievement of targets set in respect of growth,
quality of operations (measured by customer satisfaction surveys), operating
cash flow, net cash flow and personal objectives. The objective is to have
payout tied to Group performance, thereby providing higher than targeted payouts
for better than expected performance and lower than targeted payouts for
performance below the targeted levels. For executive Directors and senior
executives, bonus payments are based on the performance of the Group as a whole.
Those employed within franchises receive bonuses based on the performance within
the employing franchise.

<PAGE> 39

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TELEWEST COMMUNICATIONS PLC 41
- --------------------------------------------------------------------------------

iii) Long-term incentive arrangements

The Group operates the following long-term share and option incentive plans: The
Telewest Restricted Share Scheme (designed to operate in conjunction with an
Employee Share Ownership Plan ("ESOP")); an Inland Revenue approved executive
share option scheme, the Telewest 1995 (No.1) Executive Share Option Scheme; an
unapproved executive share option scheme, the Telewest 1995 (No.2) Executive
Share Option Scheme; a share save scheme and a profit sharing scheme designed
for Inland Revenue approval.

The Telewest Restricted Share Scheme was designed to replace a cash bonus scheme
in operation prior to the initial public offering in November 1994 and for this
reason, exercise of the award is not subject to the satisfaction of a
performance condition. Under this scheme, awards were made over Telewest shares
to senior executives based on a percentage of salary and for no consideration.
At the time of the initial public offering Mr Davidson was granted an award over
475,183 Telewest shares. Awards generally vest over a three year period with, in
the case of Mr Davidson, a final vesting date of January 1998. Awards under the
scheme are made by the ESOP Trustees following recommendations made by the
Remuneration Committee and are designed to retain and motivate senior
executives.

The executive share option schemes also form part of the Group's long-term
incentive arrangements. Options over Telewest shares are granted in phases,
generally on a one times salary basis up to a maximum of four times salary and
exercise is subject to a performance condition, namely out-performance of the
FT-SE 100 Index over any three-year period preceding exercise.

The option arrangements relating to Mr Davidson are set out on page 38 of the
Report of the Directors.

The Inland Revenue approved share save scheme is designed to incentivise
employees which enables the Company to grant options to employees to purchase
Telewest shares at a 20% discount to market price. These options can be
exercised only with funds saved by employees over time in a qualified savings
account.

It is proposed to replace the Telewest Restricted Share Scheme with a new
Long-Term Incentive Plan ("LTIP") for future share awards to executive Directors
and senior executives. It is intended that following its introduction executives
in the new plan will not be granted further options under the executive share
option schemes (subject to exceptions at the discretion of the Remuneration
Committee). In future, options under these schemes will generally be awarded to
employees not participating in the LTIP. It is also intended that, if the LTIP
is introduced, no further awards will be made under the Telewest Restricted
Share Scheme.

4. Proposed arrangements

It is proposed that two new share plans be introduced. Shareholder approval will
be sought for the introduction of these share plans at the 1997 AGM. A summary
of the rules for both plans can be found in the 1997 AGM Notice. A brief
description is set out below.

a) Equity Participation Plan ("EPP")

Under the STIP, executives may be due a cash bonus. The EPP provides that, at
the Remuneration Committee's discretion, an executive can use up to 50% of the
bonus payable to him (or such lower percentage as the Remuneration Committee may
determine), after deduction of tax, to buy Telewest shares ("bonus shares"). He
must deposit the bonus shares with the Trustee of the existing Telewest ESOP. In
return, the executive is provisionally allocated for no payment a matching
number of Telewest shares (after grossing up the value of the bonus shares).

Alternatively, at the Remuneration Committee's discretion, the executive can
agree to forego up to 50% of the bonus payable to him (or such lower percentage
as the Remuneration Committee may determine), before deduction of tax, and
receive instead a conditional right to acquire Telewest shares ("bonus shares").
In return the executive is provisionally allocated a matching number of Telewest
shares for no payment.

In each of the above cases, provided the bonus shares are retained for three
years and the executive remains employed by the Group for three years, the bonus
and matching shares would thereafter be released to the executive.

b) Long-Term Incentive Plan

Under the LTIP, which will operate on an annual basis, an executive will be
awarded the provisional right to receive, for no payment, a number of Telewest
shares with a value equating to a percentage of his/her base salary. The shares
will not vest unless certain performance criteria, based on total shareholder
return ("TSR") are met. The percentage of salary will be determined by the
Remuneration Committee and will be up to 100% of base salary for executive
Directors. The award is divided equally, with vesting of 50% depending on the
Company's TSR meeting a performance condition relating to the TSR of FT-SE 100
companies, and the remaining 50% depending on the Company's TSR meeting a
performance condition relating to the TSR of a group of comparative companies
(including cable, broadcasting and telecommunications companies listed on the
London Stock Exchange and cable companies operating in the UK and listed on
Nasdaq), in each case over a three year period. If the Company's TSR is in the
top quartile of the FT-SE 100 over that period, the executive will receive 50%
of the number of shares awarded to him; if the Company's TSR is 50th place in
the FT-SE100, the executive will receive 12.5% of the number of shares awarded
to him; if below 50th place in the FT-SE 100, the executive will receive nothing
in respect of this portion of the award. Similarly, if the Company's TSR is in
the top quartile

<PAGE> 40

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42 TELEWEST COMMUNICATIONS PLC
- --------------------------------------------------------------------------------

of the group of comparative companies in that period, the executive will receive
50% of the number of shares awarded to him; if the Company's TSR is at the
median position the executive will receive 12.5% of the number of shares awarded
to him; if below the median position, the executive will receive nothing in
respect of that portion of the award. In either test, a proportionate number of
shares will be received for intermediate positions. TSR in each case will be
calculated by reference to the cash flow generated by dividends, and capital
appreciation on a share purchased at the beginning and sold at the end of the
period. If the executive remains employed by the Group, at the end of the third
year after the date of grant, 50% of the vested award will be transferred to the
employee and the balance will be transferred at the end of the fourth year after
the date of grant if the employee remains so employed.

Assuming shareholder approval is obtained at the 1997 AGM for these plans, the
Remuneration Committee may, at its discretion, decide to operate them with
effect from 1 January 1997.

5. Pension

The Group contributes to personal pension schemes established by individual
employees. The actual contribution of the Group to such schemes depends on the
contribution made by the employee and may vary according to length of service.
Generally the Group contribution varies from 3% of an employee's salary to a
maximum of 12% for executive Directors. In addition, there is a money purchase
pension scheme to which the Group contributes an amount equal to the employee's
contribution, such contributions varying between 3% and 6%. The Group's
contribution is based on the employee's salary and does not include benefits or
bonuses.

6. Executive Directors' agreements

Mr Davidson has agreed to reduce the notice period in his employment agreement
from two years' to one year's notice in accordance with the recommendation of
the Code. However, the Remuneration Committee believes that at this stage of the
Group's development it may be necessary to offer executives contracts in excess
of one year to attract candidates of the appropriate calibre. In July 1996 Mr
Davidson's salary was increased to (pound)225,000 from (pound)151,686 to reflect
his additional responsibilities as Acting Chief Executive Officer, following the
departure of Mr Michels from the Company. This was increased to (pound)335,000
in February 1997, effective from July 1996, to reflect his confirmation as Chief
Executive Officer. For the financial year ended 1996, Mr Davidson was awarded an
annual bonus, pursuant to the STIP, of (pound)25,500.

Mr Burdick has agreed an initial two year, fixed term agreement to continue
thereafter until terminated by the Company giving no less than twelve months'
notice to expire on or at any time after the end of the initial fixed term. The
Remuneration Committee believes an initial notice period in excess of one year
is justified in view of his recent move from the US. Mr Burdick's salary has
been agreed at (pound)225,000 and he will be awarded options under the Telewest
Executive Share Option Schemes on the basis of 4 times salary to be granted as
soon as practicable and subject to the Rules of the Telewest Executive Share
Option Schemes. It is also intended that Mr Burdick shall participate in the
LTIP.

Mr Michels resigned from his position as Chief Executive Officer and from the
Board of Directors with effect from 31 July 1996. He joined the Company in
January 1994. At the time of the initial public offering in November 1994, Mr
Michels entered into a three year, fixed term employment agreement with the
Company which reflected Mr Michel's anticipated term of employment with the
Company. The Company and Mr Michels agreed the early termination of this
arrangement which resulted in a payment of (pound)410,268 being paid to Mr
Michels by the Company which reflected, with mitigation, the unexpired value of
Mr Michels' contract (including salary, housing and car allowance and net of
income taxes). There is a provision for income taxes which is subject to
agreement with the Inland Revenue.

Mr Michels is also entitled to exercise 348,001 options over Telewest shares
under the Telewest Executive Share Option Schemes and subject to the rules of
the schemes, in respect of those granted in 1995 between 1 August 1996 and 8 May
1999 and in respect of those granted in 1996 between 1 August 1996 and 10
September 1999 at prices ranging from 138p to 173.5p. He is also to receive his
award of Telewest shares under the Telewest Restricted Share Scheme of 434,787
Telewest shares which shall be transferred to him under the rules of the scheme
and his contractual arrangements.

Under the current Remuneration Committee policy senior executives have
employment agreements with notice periods which range from three months to one
year, depending on their grade.

7. Directors' remuneration

The aggregate compensation for the Directors is as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1996 1995
(pound)'000 (pound)'000
- --------------------------------------------------------------------------------
<S> <C> <C>
Base Salary and Benefits 530 1,193
Annual Bonus - STIP 25 79
Special Bonus -- 140
Pension 18 24
Compensation for loss of office 539 487

- --------------------------------------------------------------------------------
1,112 1,923
- --------------------------------------------------------------------------------
</TABLE>

Additional information required under US securities laws with respect to the
compensation of the Directors, the Chief Executive Officer and certain other
executives is set out under the caption "Executive Compensation" in the Proxy
Statement.

<PAGE> 41

- --------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS PLC 43
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

Directors' Compensation

- --------------------------------------------------------------------------------------------------------------------------------

Compensation Total
Annual/ for emoluments
Salaries/ Taxable Special loss of excluding Pension Pension
fees Benefits Bonuses office Contributions Contributions
1996 1995 1996 1995 1996 1995 1996 1995 1996 1995 1996 1995
(pound) (pound) (pound) (pound) (pound) (pound) (pound) (pound) (pound) (pound) (pound) (pound)
'000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000 '000

- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EXECUTIVE:
S J Davidson 236 143 12 12 25 98 -- -- 273 253 13 10
A Michels 100 160 68 267 -- 121 539 -- 707 548 5 5
D F Bryan -- 145 -- 344 -- -- -- 487 -- 976 -- 9

NON-EXECUTIVE
F A Vierra -- -- -- -- -- -- -- -- -- -- -- --
A G Ames -- -- -- -- -- -- -- -- -- -- -- --
A W P Stenham 50 54 -- -- -- -- -- -- 50 54 -- --
Lord Borrie QC 34 36 -- -- -- -- -- -- 34 36 -- --
Lord Griffiths 30 32 -- -- -- -- -- -- 30 32 -- --
J A Atterbury -- -- -- -- -- -- -- -- -- -- -- --
J O Robbins -- -- -- -- -- -- -- -- -- -- -- --
A N Singer -- -- -- -- -- -- -- -- -- -- -- --
C M Lillis -- -- -- -- -- -- -- -- -- -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total Board 450 570 80 623 25 219 539 487 1,094 1,899 18 24
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:

1 Certain amounts reflected in this table and elsewhere in this section were
paid in US dollars, but are represented in this table in pounds, sterling
based on an average exchange rate of $1.56 to (pound)1.00 for the year
ended 31 December 1996.

2 Mr Michels principal taxable benefits were the provision of (pound)9,841
in respect of his income taxes, housing allowance of (pound)50,638 and use
of car of (pound)6,743.

3 Mr Michels' compensation for loss of office includes a provision for
income taxes which is subject to agreement with the Inland Revenue. [/R]

4 The 1996 pension contribution for Mr Michels represents a matching
contribution to his 401(k) plan.

5 The independent non-executive Directors are paid (pound)1,000 for each
Board or Committee meeting they attend in addition to their fees. The
executive Directors' interests in Company share options and restricted
share scheme awards are set out on page 38 of the Report to the Directors
and proposed awards on page 42 of this report. No non-executive Director
has any interests in Telewest shares.

8. Remuneration policy for non-executive Directors

The remuneration policy for non-executive Directors consists of fees for their
services in connection with Board and Board Committee meetings and, where
relevant, for additional services such as chairing a committee. They are not
eligible for pension scheme membership and do not participate in any of the
Group's bonus, share option or other incentive schemes. Their remuneration is
approved by the Board of Directors.

A G Ames (Chairman)
A W P Stenham
A N Singer
The Remuneration Committee

<PAGE> 42
ATTACHED ARE COPIES OF THE TELEWEST EQUITY PARTICIPATION PLAN AND THE TELEWEST
LONG TERM INCENTIVE PLAN WHICH ARE BEING SUBMITTED PURSUANT TO ITEM 10 OF
SCHEDULE 14A UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, BUT ARE NOT
INCORPORATED IN, AND DO NOT CONSTITUTE A PART OF, THE PROXY MATERIALS FILED
HEREWITH.
<PAGE> 43
THE TELEWEST EQUITY PARTNERSHIP PLAN

CLIFFORD CHANCE
200 Aldersgate Street
London, EC1A 4JJ

Ref: PDXE/T1586/978/RTT
Date adopted:
<PAGE> 44
CONTENTS

<TABLE>
<CAPTION>
PART A Page
<S> <C> <C>
1. DEFINITIONS AND INTERPRETATION.................................... 1

2. GRANT OF AWARDS................................................... 2

3. BONUS OPTIONS AND MATCHING ALLOCATIONS............................ 4

4. ISSUE OF SHARES TO TRUSTEES ..................................... 4

5. EXERCISE OF BONUS OPTIONS AND TRANSFER OF MATCHING SHARES......... 6

6. TAKEOVER, RECONSTRUCTION AND WINDING-UP........................... 8

7. VARIATION OF CAPITAL.............................................. 9

8. ALTERATIONS....................................................... 9

9. MISCELLANEOUS..................................................... 10

PART B .................................................................... 12

1. DEFINITIONS AND INTERPRETATION.................................... 12

2. GRANT OF MATCHING ALLOCATIONS..................................... 13

3. BONUS INVESTMENT SHARES AND MATCHING SHARES....................... 14

4. ISSUE OF SHARES TO TRUSTEES .................................... 15

5. TRANSFER OF MATCHING ALLOCATIONS.................................. 17

6. TAKEOVER, RECONSTRUCTION AND WINDING-UP........................... 18

7. VARIATION OF CAPITAL.............................................. 19

8. ALTERATIONS....................................................... 19

9. MISCELLANEOUS..................................................... 20
</TABLE>
<PAGE> 45
THE TELEWEST EQUITY PARTNERSHIP PLAN

PART A

1. DEFINITIONS AND INTERPRETATION

(1) In this Part A, unless the context otherwise requires:-

"AWARD" means a Bonus Option or a Matching Allocation;

"THE AWARD DATE" in relation to an Award means the date on which the
Award was made;

"BONUS OPTION" means a conditional right to acquire shares in the
Company designated as a Bonus Option in accordance with Rule 3(1) of
Part A;

"THE COMPANY" means Telewest Communications plc (registered in England
and Wales No. 2983307);

"THE LONDON STOCK EXCHANGE" means London Stock Exchange Limited;

"MATCHING ALLOCATION" means a conditional promise to transfer shares in
the Company for no payment designated as a Matching Allocation in
accordance with Rule 3(1) of Part A;

"MATCHING SHARES" means shares the subject of a Matching Allocation;

"PART A" means Part A of the Telewest Equity Partnership Plan;

"PARTICIPANT" means a person who holds an Award granted under the Plan;

"PARTICIPATING COMPANY" means the Company or any Subsidiary;

-1-
<PAGE> 46
"THE PLAN" means The Telewest Equity Partnership Plan divided into Part
A and Part B as herein set out but subject to any alterations made
under Rule 8 of Part A or Rule 8 of Part B;

"REMUNERATION COMMITTEE" means the Remuneration Committee of the board
of directors of the Company;

"SUBSIDIARY" means a body corporate which is a subsidiary of the
Company within the meaning of section 736 of the Companies Act 1985;

"THE TRUST" means the TeleWest 1994 Employees' Share Ownership Plan
Trust established by deed on 21 November 1994;

"THE TRUSTEES" means the trustee or trustees for the time being of the
Trust;

"US PERSON" means any natural person resident in the United States of
America, its territories and possessions, any state of the United
States of America and the District of Columbia.

(2) Any reference in the Plan to any enactment includes a reference to that
enactment as from time to time modified extended or re-enacted.

(3) Any reference in this Part A to an Award means an Award granted under
Part A of the Plan.

2. GRANT OF AWARDS

(1) Subject to sub-rules (2) and (5) below, the Company may, with the
approval of the Remuneration Committee, grant an Award to any employee
or director of a Participating Company who is required to devote the
whole or substantially the whole of his working time to the service of
any Participating Company, and who is not within the two years
immediately preceding the date on which he is bound to retire in
accordance with the terms of his contract of employment, upon the terms
set out in the Plan and upon such other terms as the Remuneration
Committee may specify.

-2-
<PAGE> 47
(2) Awards may only be granted under the Plan:-

(a) within the period of 6 weeks beginning with the date on which
the Plan is adopted by the Company or the period of 6 weeks
beginning with the dealing day next following the date on
which the Company announces its annual, half-yearly or
quarterly results, or at any other time when the circumstances
are considered by the Remuneration Committee to be
sufficiently exceptional to justify the grant thereof; and

(b) within the period of 10 years beginning with the date on which
the Plan is established.

(3) There shall be no monetary consideration for the grant of any Award
under the Plan, and accordingly any such Award shall be granted by
deed.

(4) The price payable by a Participant on the acquisition of shares
pursuant to the exercise of a Bonus Option shall be in aggregate
(pound)1 (except in the case of a Participant who is a US Person, where
the price payable shall be nil).

(5) The grant of any Award under the Plan shall be subject to obtaining any
approval or consent required under the provisions of the document "The
Listing Rules" published by The London Stock Exchange, of The City Code
on Take-overs and Mergers, or of any regulation or enactment and shall
be subject to any further requirements that the Remuneration Committee
determine are necessary or desirable to comply with the securities or
tax laws being from time to time in force in the United States of
America.

(6) An Award granted under the Plan to any person shall not, except in the
case of death as provided in Rule 5(3) below, be capable of being
transferred by him and shall lapse if it is so transferred or he is
adjudged bankrupt.

-3-
<PAGE> 48
3. BONUS OPTIONS AND MATCHING ALLOCATIONS

(1) Subject to sub-rule (2) below, an Award may be granted over such number
of shares in the Company as the Remuneration Committee may determine,
but each Award shall consist of two parts, half of the shares shall be
comprised in the part which shall be designated by the Remuneration
Committee as a Bonus Option and half of the shares shall be comprised
in the part which shall be designated as a Matching Allocation at the
time it is granted.

(2) The market value (within the meaning of Part VIII of the Taxation of
Chargeable Gains Act 1992 but subject to sub-rule (3) below) of shares
in the Company which are the subject of Bonus Options granted under the
Plan to a Participant in any year shall not exceed such limit (not
exceeding the amount of any cash bonus paid to the Participant under
the Telewest annual performance-related Short Term Incentive Plan) as
the Remuneration Committee may set from time to time.

(3) For the purposes of this Rule, the market value of shares in relation
to which an Award was granted shall be calculated as on the Award Date.

4. ISSUE OF SHARES TO TRUSTEES

(1) Subject to sub-rules (3) to (6) below, the Company may, with the
approval of the Remuneration Committee,-

(a) grant to the Trustees an option to subscribe for shares in the
Company, or

(b) issue shares in the Company to the Trustees.

(2) The price at which shares may be acquired by the Trustees under the
Plan shall be determined by the Remuneration Committee before the grant
of the option to subscribe therefor or, in the case of shares issued
otherwise than in pursuance of an option, before the issue thereof,
but, if shares of the same class as those shares are listed in the
London Stock Exchange Daily Official List, shall not be less than the
middle-market quotation of shares of that class (as derived from that
List) on the dealing day last preceding the date of grant of the option
or, as the case may be, the date of issue of the shares.

-4-
<PAGE> 49
(3) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in any year which would,
at the time of the grant or issue, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options
granted in the period of 10 calendar years ending with that year, or
shall have been issued in that period otherwise than in pursuance of
options, under the Plan or under any other executive share scheme
adopted by the Company to exceed such number as represents 5 per cent
of the ordinary share capital of the Company in issue at that time.

(4) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in the period of 3
calendar years beginning with the year 1997 or any successive period of
3 years which would, at the time of the grant or issue, cause the
number of shares in the Company which shall have been or may be issued
in pursuance of options granted in the 3-year period in question, or
shall have been issued in that period otherwise than in pursuance of
options, under the Plan or under any other executive share scheme
adopted by the Company to exceed such number as represents 3 per cent
of the ordinary share capital of the Company in issue at that time.

(5) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in the period of 5
calendar years beginning with the year 1997 or any successive period of
5 years which would, at the time of the grant or issue, cause the
number of shares in the Company which shall have been or may be issued
in pursuance of options granted in that period, or shall have been
issued in that period otherwise than in pursuance of options, under the
Plan or under any other employees' share scheme adopted by the Company
to exceed such number as represents 5 per cent of the ordinary share
capital of the Company in issue at that time.

(6) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in any year which would,
at the time of the grant or issue, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options
granted in the period of 10 calendar years ending with that year, or
been issued in that period otherwise than in pursuance of options,
under the Plan or under any other employees' share scheme adopted by
the Company to exceed such number as represents 10 per cent of the
ordinary share capital of the Company in issue at that time.

-5-
<PAGE> 50
5. EXERCISE OF BONUS OPTIONS AND TRANSFER OF MATCHING SHARES

(1) The exercise of any Bonus Option granted under the Plan shall be
effected in such form and manner as the Remuneration Committee may from
time to time prescribe.

(2) Subject to sub-rules (3) and (4) below and to Rule 6 below:

(a) a Bonus Option granted under Part A of the Plan may be
exercised at any time after the Award Date;

(b) Matching Shares may only be transferred after the third
anniversary of the Award Date and only if the Bonus Option has
not been exercised before the third anniversary of the Award
Date and the Participant has not ceased to be a director or
employee of a Participating Company before the third
anniversary of the Award Date.

(3) If a Participant ceases to be a director or employee of a Participating
Company the following provisions apply in relation to any Matching
Allocation granted to him under the Plan:-

(a) subject to sub-rule (6) below, if he so ceases by reason of
death, injury, disability, redundancy (within the meaning of
the Employment Rights Act 1996) or retirement at normal
retirement age or by reason only that his office or employment
is in a company which ceases to be a Participating Company or
relates to a business or part of a business which is
transferred to a person who is not a Participating Company,
the Matching Shares shall be transferred as soon as reasonably
practicable following the date of cessation;

(b) if paragraph (a) above does not apply, the Matching Shares may
not be transferred unless the Remuneration Committee decides
otherwise.

(4) If the Participant ceases to be a director or employee of a
Participating Company for any reason, the Bonus Option may be exercised
by the Participant (or his personal representatives in the case of
death) within 6 months of his so ceasing, or such longer period as the
Remuneration Committee shall permit.

-6-
<PAGE> 51
(5) A Participant shall not be treated for the purposes of sub-rules (3)
and (4) above as ceasing to be a director or employee of a
Participating Company until such time as he is no longer a director or
employee of any of the Participating Companies, and a female
Participant who ceases to be such a director or employee by reason of
pregnancy and who exercises her right to return to work under the
Employment Rights Act 1996 before exercising a Bonus Option under the
Plan shall be treated for those purposes as not having ceased to be
such a director or employee.

(6) The number of Matching Shares which may be transferred shall be reduced
by 1 share for every 1 share over which the Bonus Option is exercised
before the third anniversary of the Award Date (or in the event of a
variation of the share capital of the Company after the exercise of the
Bonus Option, by such number as the Remuneration Committee considers
appropriate to reflect the variation).

(7) Notwithstanding any other provision of the Plan, a Bonus Option granted
under the Plan may not be exercised after the expiration of the period
of seven years beginning with the Award Date.

(8) Subject to sub-rule (9) below, within 30 days after a Bonus Option
under the Plan has been exercised by any person, the Trustees shall
transfer to him (or his nominee) the number of shares in respect of
which the Bonus Option has been exercised.

(9) In a case where a Participating Company is obliged (in any
jurisdiction) to account for any tax and/or any social security
contributions recoverable from a Participant (together, the "Tax
Liability") for which that Participant is liable by virtue of the
exercise of a Bonus Option or the transfer of Matching Shares, the
Company shall not be obliged to procure the transfer of the shares
unless it or the Participant's employing company has received on or
prior to the exercise date of the Bonus Option or the transfer of the
Matching Shares payment from the Participant of an amount not less than
the Tax Liability or unless that Participant has entered into
arrangements acceptable to the Participant's employing company to
secure that such a payment is made (whether by authorising the sale of
some or all of the shares on his behalf and the payment to the
employing company of any amount equal to the Tax Liability out of the
proceeds of sale or otherwise).

-7-
<PAGE> 52
(10) The transfer of any shares under the Plan shall be subject to obtaining
any such approval or consent as is mentioned in Rule 2(5) above.

(11) A Participant shall not be entitled to any dividend or other
distributions in respect of Matching Shares prior to the transfer of
such shares to him and shall not be entitled to vote such shares prior
to their transfer.

6. TAKEOVER, RECONSTRUCTION AND WINDING-UP

(1) If any person obtains control of the Company (within the meaning of
section 840 of the Income and Corporation Taxes Act 1988) as a result
of making a general offer to acquire shares in the Company, or having
obtained such control makes such an offer, the Remuneration Committee
shall within 7 days of becoming aware thereof notify every Participant
thereof and, subject to sub-rules (3), (4) and (7) of Rule 5 above, a
Bonus Option granted under the Plan may be exercised within one month
(or such longer period as the Remuneration Committee may permit) of
such notification, and Matching Shares shall be transferred as soon as
reasonably practicable after such notification.

(2) For the purposes of sub-rule (1) above, a person shall be deemed to
have obtained control of the Company if he and others acting in concert
with him have together obtained control of it.

(3) If any person becomes bound or entitled to acquire shares in the
Company under sections 428 to 430F of the Companies Act 1985, or if
under section 425 of that Act the Court sanctions a compromise or
arrangement proposed for the purposes of or in connection with a scheme
for the reconstruction of the Company or its amalgamation with any
other company or companies, or if the Company passes a resolution for
voluntary winding up, or if an order is made for the compulsory winding
up of the Company, the Remuneration Committee shall forthwith notify
every Participant thereof and any Award granted under the Plan may,
subject to sub-rules (3), (4) and (7) of Rule 5 above, be exercised
within one month of such notification, but to the extent that it is not
exercised within that period shall (notwithstanding any other provision
of the Plan) lapse on the expiration thereof, and Matching Shares shall
be transferred as soon as reasonably practicable after such
notification.

-8-
<PAGE> 53
7. VARIATION OF CAPITAL

(1) In the event of any increase or variation of the share capital of the
Company (whenever effected), the Remuneration Committee may make such
adjustments as it considers appropriate under sub-rule (2) below.

(2) An adjustment made under this sub-rule shall be to one or more of the
following:-

(a) the number of shares in respect of which any Bonus Option
granted under the Plan may be exercised;

(b) where any such Bonus Option has been exercised but no shares
have been transferred pursuant to such exercise, the number of
shares which may be so transferred;

(3) As soon as reasonably practicable after making any adjustment under
sub-rule (2) above, the Remuneration Committee shall give notice in
writing thereof to any Participant affected thereby.

8. ALTERATIONS

(1) Subject to sub-rule (2) below, the Remuneration Committee may at any
time alter all or any of the provisions of the Plan, or the terms of
any Award granted under it, in any respect.

(2) Subject to sub-rule (3) below, no alteration to the advantage of
Participants shall be made under sub-rule (1) above to Rules 2(1), 4,
5, 6 and 7(1) and (2) without the prior approval by ordinary resolution
of the members of the Company in general meeting.

(3) Sub-rule (2) above shall not apply to any minor alteration to benefit
the administration of the Scheme, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants or any Participating Company.

-9-
<PAGE> 54
(4) No alteration to the disadvantage of any Participant shall be made
under sub-rule (1) above unless:-

(a) the Remuneration Committee shall have invited every such
Participant to give an indication as to whether or not he
approves the alteration and

(b) the alteration is approved by a majority of those Participants
who have given such an indication.

(5) As soon as reasonably practicable after making any alteration under
sub-rule (1) above, the Remuneration Committee shall give notice in
writing thereof to any Participant affected thereby.

9. MISCELLANEOUS

(1) The rights and obligations of any individual under the terms of his
office or employment with any Participating Company shall not be
affected by his participation in the Plan or any right which he may
have to participate therein, and an individual who participates therein
shall waive any and all rights to compensation or damages in
consequence of the termination of his office or employment for any
reason whatsoever insofar as those rights arise or may arise from his
ceasing to have rights under or be entitled to exercise any Bonus
Option under the Plan or ceasing to have rights under any Matching
Allocation as a result of such termination.

(2) In the event of any dispute or disagreement as to the interpretation of
the Plan, or as to any question or right arising from or related to the
Plan, the decision of the Remuneration Committee shall be final and
binding upon all persons.

(3) The Company and any Subsidiary may provide money to the trustees of any
trust or any other person to enable them or him to acquire shares to be
held for the purposes of the Plan, or enter into any guarantee or
indemnity for those purposes, to the extent permitted by section 153(4)
of the Companies Act 1985 and, where applicable, section 154 of that
Act.

(4) Where an Award is granted under the Plan to a person who is not
chargeable to tax under Case I of Schedule E in respect of the office
or employment by virtue of which it is granted

-10-
<PAGE> 55
to him, the provisions of the Plan shall apply thereto subject to such
alterations or additions as the Remuneration Committee shall before the
grant thereof have determined having regard to any securities, exchange
control or taxation laws or regulations or similar factors which may
have application to him or to any Participating Company in relation to
the Award.

(5) Any notice or other communication under or in connection with the Plan
may be given by personal delivery or by sending the same by post, in
the case of a company to its registered office, and in the case of an
individual to his last known address, or, where he is a director or
employee of a Participating Company, either to his last known address
or to the address of the place of business at which he performs the
whole or substantially the whole of the duties of his office or
employment, and where a notice or other communication is given by
first-class post, it shall be deemed to have been received 48 hours
after it was put into the post properly addressed and stamped.

(6) The rules of the Plan and the rights and obligations of any person
thereunder shall be governed by and construed in accordance with the
law of England.

-11-
<PAGE> 56
PART B

1. DEFINITIONS AND INTERPRETATION

(1) In this Part B, unless the context otherwise requires:-

"THE AWARD DATE" means the date upon which a Matching Allocation is granted
to a Participant under the Plan;

"BONUS INVESTMENT SHARES" means shares in the Company designated as such by
a Participant under Rule 3(1) below;

"THE COMPANY" means Telewest Communications plc (registered in England and
Wales No. 2983307);

"THE LONDON STOCK EXCHANGE" means London Stock Exchange Limited;

"MATCHING ALLOCATION" means a conditional promise to transfer shares in the
Company comprising Matching Shares upon the terms set out in the Plan;

"MATCHING SHARES" means shares in the Company subject to a Matching
Allocation granted to a Participant;

"PART B" means Part B of the Telewest Equity Partnership Plan;

"PARTICIPANT" means a person who holds a Matching Allocation granted under
the Plan;

"PARTICIPATING COMPANY" means the Company or any Subsidiary;

"THE PLAN" means The Telewest Equity Partnership Plan divided into Part A
and Part B as herein set out but subject to any alterations made under Rule
8 of Part A or Rule 8 of Part B;

-12-
<PAGE> 57
"REMUNERATION COMMITTEE" means the Remuneration Committee of the board
of directors of the Company;

"SUBSIDIARY" means a body corporate which is a subsidiary of the
Company within the meaning of section 736 of the Companies Act 1985;

"THE TRUST" means the TeleWest 1994 Employees' Share Ownership Plan
Trust established by deed on 21 November 1994;

"THE TRUSTEES" means the trustee or trustees for the time being of the
Trust.

"US PERSON" means any natural person resident in the United States of
America, its territories and possessions, any state of the United
States of America and the District of Columbia.

(2) Any reference in the Plan to any enactment includes a reference to that
enactment as from time to time modified extended or re-enacted.

(3) Any reference in this Part B to a Matching Allocation means a Matching
Allocation granted under Part B of the Plan.

2. GRANT OF MATCHING ALLOCATIONS

(1) Subject to sub-rules (2) and (5) below, and to Rule 3 below, the
Company may, with the approval of the Remuneration Committee, grant a
Matching Allocation to any employee or director of a Participating
Company who is required to devote the whole or substantially the whole
of his working time to the service of any Participating Company, and
who is not within the two years immediately preceding the date on which
he is bound to retire in accordance with the terms of his contract of
employment, upon the terms set out in the Plan and upon such other
terms as the Remuneration Committee may specify.

(2) A Matching Allocation may only be granted under the Plan:-

(a) within the period of 6 weeks beginning with the date on which
the Plan is adopted by the Company or the period of 6 weeks
beginning with the dealing day next

-13-
<PAGE> 58
following the date on which the Company announces its annual,
half-yearly or quarterly results, or at any time when the
circumstances are considered by the Remuneration Committee to
be sufficiently exceptional to justify the grant thereof; and

(b) within the period of 10 years beginning with the date on which
the Plan is established.

(3) There shall be no monetary consideration for the grant of any Matching
Allocation under the Plan, and accordingly any such Matching Allocation
shall be granted by deed.

(4) The number of shares in the Company subject to a Matching Allocation
granted to a Participant shall be ascertained in accordance with Rule 3
below.

(5) The grant of any Matching Allocation under the Plan shall be subject to
obtaining any approval or consent required under the provisions of the
document "The Listing Rules" published by The London Stock Exchange, of
The City Code on Take-overs and Mergers, or of any regulation or
enactment and shall be subject to any further requirements that the
remuneration Committee determine are necessary or desirable to comply
with the securities or tax laws being from time to time in force in the
United States of America.

(6) A Matching Allocation granted under the Plan to any person shall not,
except in the case of death as provided in Rule 5(2) below, be capable
of being transferred by him and shall lapse forthwith if it is so
transferred or if he is adjudged bankrupt.

3. BONUS INVESTMENT SHARES AND MATCHING SHARES

(1) A Participant shall designate shares in the Company as Bonus Investment
Shares in accordance with sub-rules (2) and (3) below. The Company
shall, so far as it is able, procure that the Bonus Investment Shares
are dealt with in accordance with this Rule 3 and that the Trustees act
in accordance herewith.

(2) A Participant may deposit shares acquired by him on the Award Date
using the permitted percentage of any cash bonus paid to him (after
deduction of tax) by the Company under the

-14-
<PAGE> 59
Telewest annual performance-related Short Term Incentive Plan with the
Trustees in accordance with sub-rule (3) below (and for the purposes of
this sub-rule the permitted percentage shall be such percentage (not
exceeding 50%) as the Remuneration Committee may decide from time to
time).

(3) The shares acquired pursuant to sub-rule (2) above shall either be
registered in the name of the Trustees (or such other person as the
Trustees may decide) and held by them as nominee for that Participant
or may be retained by the Participant on terms specified by the
Trustees.

(4) When the Trustees (or such other person as the Trustees may decide)
hold the Bonus Investment Shares, dividends paid on the Bonus
Investment Shares shall be beneficially owned by the Participant and
the Trustees shall arrange for the dividends to be paid directly to the
Participant or to his order.

(5) The Trustees shall not exercise the voting rights attaching to the
Bonus Investment Shares except in accordance with instructions from the
Participant.

(6) Where the Trustees (or such other person as the Trustees may decide)
hold the Bonus Investment Shares, the Participant may at any time
withdraw the Bonus Investment Shares and the Trustees shall upon notice
from the Participant transfer the Bonus Investment Shares to the
Participant (or such person as he may nominate).

(7) The number of Matching Shares which are the subject of a Matching
Allocation to a Participant shall be such number as has on the Award
Date a market value equal to the amount which represents the gross sum
that the Participant would need to be remunerated by the Company before
deduction of tax and social security liabilities to enable the
Participant to purchase after deduction of tax and social security
liabilities the Bonus Investment Shares on the Award Date.

4. ISSUE OF SHARES TO TRUSTEES

(1) Subject to sub-rules (3) to (6) below, the Company may, with the
approval of the Remuneration Committee,-

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<PAGE> 60
(a) grant to the Trustees an option to subscribe for shares in the
Company, or

(b) issue shares in the Company to the Trustees.

(3) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in any year which would,
at the time of the grant or issue, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options
granted in the period of 10 calendar years ending with that year, or
shall have been issued in that period otherwise than in pursuance of
options, under the Plan or under any other executive share scheme
adopted by the Company to exceed such number as represents 5 per cent
of the ordinary share capital of the Company in issue at that time.

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<PAGE> 61
of options granted in that period, or shall have been issued in that
period otherwise than in pursuance of options, under the Plan or under
any other employees' share scheme adopted by the Company to exceed such
number as represents 5 per cent of the ordinary share capital of the
Company in issue at that time.

5. TRANSFER OF MATCHING ALLOCATIONS

(1) Subject to sub-rule (2) below, Matching Shares may only be transferred
after the third anniversary of the Award Date and if the Participant
has not ceased to be a director or employee of a Participating Company
before the third anniversary of the Award Date.

(2) If any Participant ceases to be a director or employee of a
Participating Company, the following provisions apply in relation to
any Matching Allocation granted to him under the Plan:-

(a) if he so ceases by reason of death, injury, disability,
redundancy (within the meaning of the Employment Rights Act
1996) or retirement on reaching normal retirement age, or by
reason only that his office or employment is in a company
which ceases to be a Participating Company or relates to a
business or part of a business which is transferred to a
person who is not a Participating Company, the Matching Shares
shall be transferred as soon as reasonably practicable
following the date of cessation;

(b) if paragraph (a) above does not apply, the Matching Shares may
not be transferred unless the Remuneration Committee decides
otherwise;

and the Company shall procure the transfer of the Bonus Investment
Shares to the Participant as soon as reasonably practicable following
the date of the Participant's cessation.

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<PAGE> 62
(3) A Participant shall not be treated for the purposes of sub-rule (2)
above as ceasing to be a director or employee of a Participating
Company until such time as he is no longer a director or employee of
any of the Participating Companies.

(4) If a Participant withdraws any of the Bonus Investment Shares in
respect of which the Matching Allocation was granted before the third
anniversary of the Award Date, the number of Matching Shares which may
be transferred shall be reduced in proportion to the proportion which
the number of Bonus Investment Shares withdrawn bears to the total
number of Bonus Investment Shares (or in the event of a variation of
the share capital of the Company after the withdrawal of any Bonus
Investment Shares, by such number as the Board considers appropriate to
reflect the variation).

(5) In a case where a Participating Company is obliged (in any
jurisdiction) to account for any tax and/or any social security
contributions recoverable from a Participant (together, the "Tax
Liability") for which that Participant is liable by virtue of the
transfer of Matching Shares, the Company shall not be obliged to
procure the transfer of such shares unless it or the Participant's
employing company has received on or prior to the transfer of the
Matching Shares payment from the Participant of an amount not less than
the Tax Liability or unless that Participant has entered into
arrangements acceptable to the Participant's employing company to
secure that such a payment is made (whether by authorising the sale of
some or all of the Matching Shares on his behalf and the payment to the
employing company of an amount equal to the Tax Liability out of the
proceeds of sale or otherwise).

(6) The transfer of any shares under the Plan shall be subject to obtaining
any such approval or consent as is mentioned in Rule 2(5) above.

(7) A Participant shall not be entitled to any dividend or other
distributions in respect of Matching Shares prior to the transfer of
such shares to him and shall not be entitled to vote such shares prior
to their transfer.

6. TAKEOVER, RECONSTRUCTION AND WINDING-UP

(1) If any person obtains control of the Company (within the meaning of
section 840 of the Income and Corporation Taxes Act 1988) as a result
of making a general offer to acquire

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<PAGE> 63
shares in the Company, or having obtained such control makes such an
offer, the Board shall within 7 days of becoming aware thereof notify
every Participant thereof and, subject to sub-rule (2) of Rule 5 above
and sub-rule (3) below, Matching Shares shall be transferred as soon as
reasonably practicable after such notification.

(2) For the purposes of sub-rule (1) above, a person shall be deemed to
have obtained control of the Company if he and others acting in concert
with him have together obtained control of it.

(3) If any person becomes bound or entitled to acquire shares in the
Company under sections 428 to 430F of the Companies Act 1985, or if
under section 425 of that Act the Court sanctions a compromise or
arrangement proposed for the purposes of or in connection with a scheme
for the reconstruction of the Company or its amalgamation with any
other company or companies, or if the Company passes a resolution for
voluntary winding up, or if an order is made for the compulsory winding
up of the Company, the Board shall within 7 days of becoming aware
thereof notify every Participant thereof and Matching Shares shall be
transferred as soon as reasonably practicable after such notification.

7. VARIATION OF CAPITAL

(1) In the event of any increase or variation of the share capital of the
Company (whenever effected), the Remuneration Committee may make such
adjustments as they consider appropriate to the number of Matching
Shares.

(2) As soon as reasonably practicable after making any adjustment under
sub-rule (1) above, the Remuneration Committee shall give notice in
writing thereof to any Participant affected thereby.

8. ALTERATIONS

(1) Subject to sub-rule (2) below, the Remuneration Committee may at any
time alter all or any of the provisions of the Plan, or the terms of
any Matching Allocation granted under it, in any respect.

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<PAGE> 64
(2) Subject to sub-rule (3) below, no alteration to the advantage of
Participants shall be made under sub-rule (1) above to either of Rules
2(1), 4, 5, 6, 7(1) and (2) without the prior approval by ordinary
resolution of the members of the Company in general meeting.

(3) Sub-rule (2) above shall not apply to any minor alteration to benefit
the administration of the Scheme, to take account of a change in
legislation or to obtain or maintain favourable tax, change control or
regulatory treatment for Participants or any Participating Company.

(4) No alteration to the disadvantage of any existing rights of a
Participant shall be made under sub-rule (1) above unless:-

(c) the Remuneration Committee shall have invited every such
Participant to give an indication as to whether or not he
approves the alteration, and

(d) the alteration is approved by a majority of those Participants
who have given such an indication.

(5) As soon as reasonably practicable after making any alteration under
sub-rule (1) above, the Remuneration Committee shall give notice in
writing thereof to any Participant affected thereby.

9. MISCELLANEOUS

(1) The rights and obligations of any individual under the terms of his
office or employment with any Participating Company shall not be
affected by his participation in the Plan or any right which he may
have to participate therein, and an individual who participates therein
shall waive any and all rights to compensation or damages in
consequence of the termination of his office or employment for any
reason whatsoever insofar as those rights arise or may arise from his
ceasing to have rights under any Matching Allocation under the Plan as
a result of such termination.

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<PAGE> 65
(3) The Company and any Subsidiary may provide money to the trustees of any
trust or any other person to enable them or him to acquire shares to be
held for the purposes of the Plan, or enter into any guarantee or
indemnity for those purposes, to the extent permitted by section 153(4)
of the Companies Act 1985 and, where applicable, section 154 of that
Act.

(4) Where a Matching Allocation is granted under the Plan to a person who
is not chargeable to tax under Case I of Schedule E in respect of the
office or employment by virtue of which it is granted to him, the
provisions of the Plan shall apply thereto subject to such alterations
or additions as the Remuneration Committee shall before the grant
thereof have determined having regard to any securities, exchange
control or taxation laws or regulations or similar factors which may
have application to him or to any Participating Company in relation to
the Matching Allocation.

(6) The rules of the Plan and the rights and obligations of any person
thereunder shall be governed by and construed in accordance with the
law of England.

CLIFFORD CHANCE
200 Aldersgate Street
London, EC1A 4JJ

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<PAGE> 66
THE TELEWEST LONG TERM INCENTIVE PLAN

CLIFFORD CHANCE
200 Aldersgate Street
London EC1A 4JJ

Date adopted: [ ]

Ref: PDXE/T1586/978/RTT
<PAGE> 67
CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
1. DEFINITIONS AND INTERPRETATION..................................... 2

2. ALLOCATIONS........................................................ 3

3. ISSUE OF SHARES TO TRUSTEES........................................ 4

4. TRANSFER OF SHARES................................................. 5

5. TAKEOVER, RECONSTRUCTION AND WINDING-UP............................ 7

6. VARIATION OF CAPITAL............................................... 8

7. ALTERATIONS........................................................ 8

8. MISCELLANEOUS...................................................... 9

SCHEDULE .................................................................. 10
</TABLE>

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<PAGE> 68
1. DEFINITIONS AND INTERPRETATION

(1) In this Plan, unless the context otherwise requires:-

"ALLOCATION" means a promise to transfer shares in the Company in
accordance with the Rules of the Plan and the term "allocated" shall be
construed accordingly;

"THE ALLOCATION DATE" in relation to an Allocation means the date on
which the Company makes an Allocation;

"ALLOCATED SHARES" means any shares which are comprised in an
Allocation under the Plan and have not been transferred, renounced or
forfeited in accordance with the Rules of the Plan;

"THE COMPANY" means Telewest Communications plc (registered in England
and Wales No. 2983307);

"FINANCIAL YEAR" means a financial year of the Company within the
meaning of section 742 of the Companies Act 1985;

"THE LONDON STOCK EXCHANGE" means London Stock Exchange Limited;

"PARTICIPANT" means a person who is given an Allocation under the Plan;

"PARTICIPATING COMPANY" means the Company or any Subsidiary;

"THE PERFORMANCE PERIOD" in relation to an Allocation means a period of
three years commencing on the first day of the Financial Year in which
the Allocation Date falls;

"THE PLAN" means the Telewest Long Term Incentive Plan as herein set
out but subject to any alterations made under Rule 7 below;

"THE REMUNERATION COMMITTEE" means the remuneration committee of the
board of directors of the Company;

"SUBSIDIARY" means a body corporate which is a subsidiary of the
Company within the meaning of section 736 of the Companies Act 1985;

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<PAGE> 69
"THE TRUSTEES" means the trustees or trustee for the time being of the
TeleWest 1994 Employees' Share Ownership Plan Trust.

(2) Any reference in the Plan to any enactment includes a reference to that
enactment as from time to time modified extended or re-enacted.

2. ALLOCATIONS

(1) Subject to sub-rules (2) and (5) below, the Company may, with the
approval of the Remuneration Committee, make an Allocation to any
employee of a Participating Company (including an employee who is also
a director), and who is not within the two years immediately preceding
the date on which he is bound to retire in accordance with the terms of
his contract of employment, upon the terms set out in the Plan and upon
such other terms as the Remuneration Committee may specify.

(2) An Allocation may only be made under the Plan:-

(b) within the period of 10 years beginning with the date on which
the Plan is established.

(3) No payment for an Allocation shall be made by a Participant.

(4) The interest of a Participant in Allocated Shares:-

(a) shall not, except as provided in Rule 4(4) below, be capable
of being transferred by him, and

(b) shall be forfeited by him forthwith if he is adjudged
bankrupt.

(5) The making of any Allocation under the Plan shall be subject to
obtaining any approval or consent required under the provisions of the
document "The Listing Rules" published by the London Stock Exchange, of
the City Code on Take-Overs and Mergers, or of any regulation

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<PAGE> 70
or enactment and shall be subject to any further requirements that the
Remuneration Committee determine are necessary or desirable to comply
with the securities or tax laws being from time to time in force in the
United States of America.

(6) Unless the Remuneration Committee decides otherwise, the number of
shares which may be allocated to any person in any Financial Year shall
not exceed such number as has a market value equal to 100 per cent of
his salary.

(7) For the purposes of sub-rule (6) above:-

(a) the MARKET VALUE of the shares in respect of which an
Allocation is made shall, at a time when the shares in the
Company are listed in the London Stock Exchange Daily Official
List, be taken to be an amount equal to the average of the
closing prices of such shares (as derived from that List) on
the five dealing days last preceding the Allocation Date;

(b) a person's SALARY shall be taken to be his basic salary
(excluding benefits in kind), expressed as an annual rate,
payable by the Participating Companies to him as at the
beginning of the Financial Year in which the Allocation Date
falls or, if he was not then an employee of a Participating
Company, as at the Allocation Date.

3. ISSUE OF SHARES TO TRUSTEES

(1) Subject to sub-rules (3) to (6) below, the Company may, with the
approval of the Remuneration Committee,-

(a) grant to the Trustees an option to subscribe for shares in the
Company, or

(b) issue shares in the Company to the Trustees.

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<PAGE> 71
(3) No options shall be granted, or shares issued otherwise than pursuant
to the exercise of an option, under the Plan in any year which would,
at the time of the grant or issue, cause the number of shares in the
Company which shall have been or may be issued in pursuance of options
granted in the period of 10 calendar years ending with that year, or
shall have been issued in that period otherwise than in pursuance of
options, under the Plan or under any other executive share scheme
adopted by the Company to exceed such number as represents 5 per cent
of the ordinary share capital of the Company in issue at that time.

4. TRANSFER OF SHARES

(1) The transfer of any shares under the Plan shall be effected in such
form and manner as the Remuneration Committee from time to time
prescribe.

-5-
<PAGE> 72
(2) Except where Rule 5 below applies, such percentage of the Allocated
Shares shall be transferred as the conditions in the Schedule provide
("the Relevant Shares").

(3) Except where sub rules (4), (5) or (6) below or Rule 5 below applies,
50% of the Relevant Shares shall be transferred as soon as reasonably
practicable three years after the Allocation Date and the remaining 50%
of the Relevant Shares shall be transferred as soon as reasonably
practicable four years after the Allocation Date.

(4) If any Participant dies before Allocated Shares are transferred to him
and at a time when he is either a director or employee of a
Participating Company or entitled to have the Allocated Shares
transferred to him by virtue of sub-rule (5) or (6) below, then:-

(a) the Relevant Shares shall be transferred to his personal
representatives, but

(b) if he dies before the end of the Performance Period, the
Relevant Shares shall not be transferred before the end of the
Performance Period and only such proportion of the Relevant
Shares may be transferred as the duration of his employment
bears to the whole of the Performance Period.

(5) If any Participant ceases to be a director or employee of a
Participating Company by reason of injury, disability, redundancy
(within the meaning of the Employment Rights Act 1996), or retirement
on reaching the age at which he is bound to retire in accordance with
the terms of his contract of employment, or by reason only that his
office or employment is in a company which ceases to be a Participating
Company, or relates to a business or part of a business which is
transferred to a person who is not a Participating Company, then:-

(d) if he so ceases before the end of the Performance Period, the
Relevant Shares shall not be transferred before the end of the
Performance Period and only such proportion of the Relevant
Shares may be transferred as the duration of his employment
bears to the whole of the Performance Period.

(6) If any Participant ceases to be a director or employee of a
Participating Company otherwise than as mentioned in sub-rule (4) or
(5) above, no Allocated Shares shall be transferred to him at all
unless the Remuneration Committee shall so permit, in which event such
number of Relevant Shares may be transferred as permitted by the
Remuneration Committee, provided that the number does not exceed such
proportion of the Relevant Shares as the duration of his employment
bears to the whole of the Performance Period.

-6-
<PAGE> 73
(7) A Participant shall not be treated for the purposes of sub-rules (5)
and (6) above as ceasing to be a director or employee of a
Participating Company until such time as he is no longer a director or
employee of any of the Participating Companies, and a female
Participant who ceases to be such a director or employee by reason of
pregnancy or confinement and who exercises her right to return to work
under the Employment Rights Act 1996 before the Allocated Shares are
transferred to her shall be treated for those purposes as not having
ceased to be such a director or employee.

(8) The Company shall procure the transfer to a Participant (or a nominee
for him) of the number of Allocated Shares to which he is entitled,
unless:-

(a) the Remuneration Committee considers that the transfer thereof
would not be lawful in all relevant jurisdictions; or

(b) in a case where any company is obliged (in any jurisdiction)
to account for any tax and/or any social security
contributions recoverable from a Participant (together, the
"Tax Liability") for which that Participant is liable by
virtue of being entitled to the transfer of Allocated Shares,
the Company shall not be obliged to procure the transfer of
the shares, unless either it or the Participant's employing
company has received on or prior to the transfer of the
Allocated Shares payment from the Participant of an amount not
less than the Tax Liability, or that Participant has entered
into arrangements acceptable to the Participant's employing
company to secure that such a payment is made (whether by
authorising the sale of some or all of the shares on his
behalf and the payment to the employing company of an amount
equal to the Tax Liability out of the proceeds of sale or
otherwise).

5. TAKEOVER, RECONSTRUCTION AND WINDING-UP

(1) If any person obtains control of the Company (within the meaning of
section 840 of the Income and Corporation Taxes Act 1988) as a result
of making a general offer to acquire shares in the Company, or having
obtained such control makes such an offer, or if any person becomes
bound or entitled to acquire shares in the Company under sections 428
to 430F of the Companies Act 1985, or if under section 425 of the
Companies Act 1985 the Court sanctions a compromise or arrangement
proposed for the purposes of or in connection with a scheme for the
reconstruction of the Company or its amalgamation with any other
company or companies, or if the Company passes a resolution for
voluntary winding up, or if an order is made for the compulsory winding
up of the Company, the Allocated Shares shall be transferred as soon as
practicable thereafter.

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<PAGE> 74
(2) For the purposes of sub-rule (1) above, a person shall be deemed to
have obtained control of the Company if he and others acting in concert
with him have together obtained control of it.

6. VARIATION OF CAPITAL

(1) In the event of any increase or variation of the share capital of the
Company (whenever effected), the Remuneration Committee may adjust the
number of Allocated Shares as it considers appropriate.

(2) As soon as reasonably practicable after making any adjustment under
sub-rule (1) above, the Company shall give notice in writing thereof to
any Participant affected thereby.

7. ALTERATIONS

(1) Subject to sub-rules (2) and (4) below, the Remuneration Committee may
at any time alter any of the provisions of the Plan, or the terms of
any Allocation made under it, in any respect.

(2) Subject to sub-rule (3) below, no alteration to the advantage of
Participants shall be made under sub-rule (1) above to any of Rules
2(1), 2(5), 3(3) to 3(6) inclusive, 4, 5, 6(1) and 6(2) without the
prior approval by ordinary resolution of the members of the Company in
general meeting.

(3) Sub-rule (2) above shall not apply to any minor alteration to benefit
the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favourable tax, exchange control
or regulatory treatment for Participants or any Participating Company.

(4) No alteration to the disadvantage of any Participant shall be made
under sub-rule (1) above unless:-

(a) the Company shall have invited every such Participant to give
an indication as to whether or not he approves the alteration,
and

(b) the alteration is approved by a majority of those Participants
who have given such an indication.

(5) As soon as reasonably practicable after making any alteration under
sub-rule (1) above, the Company shall give notice in writing thereof to
any Participant affected thereby.

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<PAGE> 75
8. MISCELLANEOUS

(1) The rights and obligations of any individual under the terms of his
office or employment with any Participating Company shall not be
affected by his participation in the Plan or any right which he may
have to participate therein, and an individual who participates therein
shall waive any and all rights to compensation or damages in
consequence of the termination of his office or employment for any
reason whatsoever insofar as those rights arise or may arise from his
ceasing to have rights under any Allocation under the Plan as a result
of such termination.

(4) Where an Allocation is granted under the Plan to a person who is not
chargeable to tax under Case I of Schedule E in respect of the office
or employment by virtue of which it is granted to him, the provisions
of the Plan shall apply thereto subject to such alterations or
additions as the Remuneration Committee shall before the grant thereof
have determined having regard to any securities, exchange control or
taxation laws or regulations or similar factors which may have
application to him or to any Participating Company in relation to the
Allocation.

(6) The rules of the Plan and the rights and obligations of any person
thereunder shall be governed by and construed in accordance with the
law of England.

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<PAGE> 76
SCHEDULE

PART A

1. For the purposes of the Schedule:-

(a) "TSR" means total shareholder return, calculated by Datastream
after:-

(i) reinvesting dividends (plus associated tax credits)
on a company's shares on the day on which the shares
went ex-dividend on the London Stock Exchange;

(ii) making such adjustments to take account of any
increase or variation of the share capital of a
company as the Remuneration Committee considers
relevant; and

(iii) averaging the index of closing share prices and
reinvested dividends for the period of three months
preceding the Performance Period and averaging the
index of closing share prices and reinvested
dividends for the final three months of the
Performance Period.

(b) "THE FT-SE 100 INDEX" means the Financial Times - Stock
Exchange index of the market values of 100 leading UK
equities;

(c) "THE COMPARATOR COMPANIES" means the group of companies set
out in Part B of the Schedule (or such other such group of
companies as the Board may decide from time to time before an
Allocation is made, taking into account any factors considered
by the Board to be relevant);

(d) "THE RELEVANT FT-SE 100 COMPANIES" means the companies which
were the constituent companies for the purposes of the FT-SE
100 Index at the commencement of the Performance Period in
question and, if it was not such a company, the Company;

(e) "THE RELEVANT COMPARATOR COMPANIES" means the Company and the
Comparator Companies which were listed on the London Stock
Exchange at the commencement of the Performance Period in
question

-10-
<PAGE> 77
(f) any reference to the Company's POSITION is a reference to what
would be its position in a table of the Relevant FT-SE 100
Companies or a table of the Relevant Comparator Companies
arranged in descending order according to the TSR of each of
them for the Performance Period.

(g) in the event that one of the Relevant FT-SE 100 Companies or
one of the Relevant Comparator Companies is taken over, the
TSR of that company shall be calculated up to the date of
change of control (within the meaning of section 840 of the
Income and Corporation Taxes Act 1988) of that company on the
basis that:-

(i) if the takeover is on terms that an offer wholly or
partly in cash is made to shareholders, that cash is
assumed to have been reinvested in the FT-SE 100
Index for the balance of the Performance Period;

(ii) if the takeover is on terms that it is compulsory for
part or all of the offer to be satisfied in the form
of shares, those shares are assumed to be held until
the end of the Performance Period.

(h) in the event of a demerger of one of the Relevant FT-SE 100
Companies or one of the Relevant Comparator Companies into two
or more companies quoted on a recognised stock exchange
(within the meaning of that term as set out in section 841 of
the Income and Corporation Taxes Act 1988), the TSR of the
relevant company will be calculated by aggregating the total
shareholder return of the demerged company or companies and
the company from which it or they demerged for the part of the
Performance Period following the demerger becoming effective.

2. If one of the events specified in Rule 5(1) occurs, for the purposes of
the calculation of TSR the middle-market quotation of the Relevant
FT-SE 100 Companies or the Relevant Comparator Companies on such date
shall be taken as the final share price of such companies (and the
final share price shall not be averaged) and the final share price of
the Company shall be taken as the most valuable option offered to
shareholders in the Company as at the date of such event.

3. The percentage of the Allocated Shares to be transferred, when TSR is
measured against the Relevant FT-SE 100 Companies, is as follows:-

(a) 50% of the Allocated Shares if the Company is in the 25th (or
a higher) position;

(b) 12-1/2% of the Allocated Shares if the Company is in the 50th
position;

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<PAGE> 78
(c) 0% of the Allocated Shares if the Company is in the 51st (or a
lower) position;

and pro rata for positions between those specified at (a) and (b)
above.

4. The percentage of the Allocated Shares to be transferred, when TSR is
measured against the Relevant Comparator Companies, is as follows:-

(a) 50% of the Allocated Shares if the Company has an upper
quartile position;

(b) 12-1/2% of the Allocated Shares if the Company is at the
median position (or if there is no median position, the
position immediately above the median position);

and pro rata for positions between those specified at (a) and (b)
above.

5. The Remuneration Committee may make such adjustments to the method of
calculating TSR or any other feature of the Schedule as it considers
appropriate to ensure that the condition in the Schedule achieves its
original purpose.

PART B

LIST OF COMPARATOR COMPANIES

British Telecommunications plc

Vodafone Group plc

Orange plc

General Cable plc

British Sky Broadcasting Group plc

Flextech plc

Eurotunnel plc

Comcast Corp

Nynex Corporation

International CabelTel Corp

Carlton Communications plc

Yorkshire Tyne Tees Television Holdings plc

HTV Group plc

Scottish Television plc

-12-
<PAGE> 79

- --------------------------------------------------------------------------------
TELEWEST COMMUNICATIONS PLC
- --------------------------------------------------------------------------------

TELEWEST COMMUNICATIONS PLC

PROXY CARD

I/We________________________________ of_________________________________________
________________________________________________________________________________
being the holder(s) of Ordinary Shares of 10 pence each in Telewest
Communications plc (the "Company") hereby appoint the Chairman of the meeting or
____________________________ of_________________________________________________
________________________________________________________________________________
as my/our proxy to vote in my/our name(s) and on my/our behalf at the Annual
General Meeting of the Company to be held on Friday, 9 May 1997, at 10.00 am at
The Grocers' Hall, Princes Street, London EC2R 8AD, and at any adjournment
thereof and I/we direct the proxy to vote in respect of the resolutions to be
proposed at the meeting as indicated herein.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.

<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
ORDINARY RESOLUTIONS For Against
- --------------------------------------------------------------------------------------------------------------------------

1 To adopt the Directors' Report and Accounts for the year ended 31 December 1996.

- --------------------------------------------------------------------------------------------------------------------------
2 To reappoint Mr F.A. Vierra as a Director.
- --------------------------------------------------------------------------------------------------------------------------
3 To reappoint Mr A.W.P. Stenham as a Director.*
- --------------------------------------------------------------------------------------------------------------------------
4 To reappoint Mr A.G. Ames as a Director.*
- --------------------------------------------------------------------------------------------------------------------------
5 To reappoint Mr J.A. Atterbury III as a Director.
- --------------------------------------------------------------------------------------------------------------------------

6 To reappoint Lord Borrie QC as a Director.
- --------------------------------------------------------------------------------------------------------------------------

7 To reappoint Mr C.J. Burdick as a Director.
- --------------------------------------------------------------------------------------------------------------------------

8 To reappoint Mr S.J. Davidson as a Director.
- --------------------------------------------------------------------------------------------------------------------------
9 To reappoint Lord Griffiths of Fforestfach as a Director.
- --------------------------------------------------------------------------------------------------------------------------
10 To reappoint Mr C.M. Lillis as a Director.
- --------------------------------------------------------------------------------------------------------------------------
11 To reappoint Mr J.O. Robbins as a Director.
- --------------------------------------------------------------------------------------------------------------------------
12 To reappoint Mr A.N. Singer as a Director.*
- --------------------------------------------------------------------------------------------------------------------------
13 To authorise the Directors to allot ordinary shares.
- --------------------------------------------------------------------------------------------------------------------------
SPECIAL RESOLUTION
- --------------------------------------------------------------------------------------------------------------------------
14 To disapply statutory pre-emption rights.
Note: The effectiveness of this Resolution is conditional upon the approval of Resolution 13.
- --------------------------------------------------------------------------------------------------------------------------

ORDINARY RESOLUTIONS

- --------------------------------------------------------------------------------------------------------------------------
15 To reappoint KPMG Audit plc as auditors and fix their remuneration.
- --------------------------------------------------------------------------------------------------------------------------

16 To approve the Telewest Equity Participation Plan.

- --------------------------------------------------------------------------------------------------------------------------

17 To approve the Telewest Long Term Incentive Plan.

- --------------------------------------------------------------------------------------------------------------------------
SPECIAL RESOLUTION
- --------------------------------------------------------------------------------------------------------------------------

18 To approve the change to the Articles of Association to increase the borrowing powers of the Company.

- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
[/R]

NAME(S) OF SHAREHOLDER(S) IN BLOCK CAPITALS_____________________________________

DATED______________________ SIGNED______________________________________________

NOTES:

1 Please indicate how you wish your vote to be cast by inserting an "X" in
the appropriate box opposite each resolution.

2 A holder of Ordinary Shares entitled to attend and vote at the
meeting is also entitled to appoint one or more proxies to attend and
vote instead of the shareholder. A proxy need not be a shareholder
of the Company. In the event that you wish to appoint a person
other than the Chairman as your proxy, delete the reference to the
Chairman and insert the name and address of the person you wish
to appoint in the space provided.

3 This form of proxy must be executed by the appointor or his/her duly
constituted attorney or, if the appointor is a company, under its seal or
under the hand of its duly authorised officer or attorney or other person
authorised to sign.

4 In the case of joint holders of the Ordinary Shares the vote of the senior
who tenders a vote whether in person or by proxy shall be accepted to the
exclusion of the vote of the other joint holders and for this purpose
seniority shall be determined by the order in which the names of the
holders stand in the register of shareholders.

5 Any alteration made in this Proxy Card should be initialled.

6 To be effective this Proxy Card and any authority under which it is
executed (or a notarially certified copy of each authority) must be
deposited at Lloyds Bank plc, Registrar's Department, The
Causeway, Worthing, West Sussex, England BN99 6DB not less than 48 hours
before the time of the Annual General Meeting. Completion and return of
this Proxy Card will not preclude a shareholder from attending and voting
in person at the meeting.

7 IF THIS PROXY CARD IS RETURNED DULY SIGNED BUT WITHOUT AN INDICATION AS TO
HOW THE PROXY MUST VOTE ON A PARTICULAR RESOLUTION, THE PROXY WILL VOTE OR
ABSTAIN AT HIS DISCRETION.

8 *Indicates the members of the Remuneration Committee.